The bank facilitated $142 billion worth of transfers between crypto exchanges and financial institutions in Q1.
On Tuesday, Silvergate Bank, a crypto-fiat gateway network designed for financial institutions, announced its results for the first quarter of 2022. During this period, its revenue and net income grew by 93% and 94% year-over-year, respectively, to $59.9 million and $24.7 million. The company is most notable for its Silvergate Exchange Network, or SEN, which facilitates U.S. dollar and euro transfers between cryptocurrency exchanges and institutional investors.
Despite its growth, however, institutional interest in crypto took a significant hit in Q1 due to the ongoing bear market. As told by Silvergate, the amount of SEN transfers it facilitated decreased from $167 billion in Q1 2021 to $142 billion in Q1 2022. Simultaneously, as part of broader industry trends, Bitcoin (BTC) and Ethereum (ETH) spot trading fell 33% year-over-year to $1.046 trillion in Q1 2022.
Nevertheless, the company also saw a sharp increase in its cryptocurrency storage segment. Partly due to an annualized cost of deposit of 0.00%, institutional investors placed an average of $14.7 billion in digital assets in Silvergate's hands, compared to $6.4 billion in Q1 2021.
Cointelegraph previously reported that Silvergate purchased Mark Zuckerberg's stablecoin project, Diem, for $182 million after it became defunct. Silvergate currently sees expanding its stablecoin infrastructure as a key area of growth. At the moment, like traditional banks, the company derives the vast majority of its revenue from interest income; that is, using borrowers' deposits as collateral to issue loans, purchase interest-bearing securities or depositing them in interest-bearing accounts at other banks.