Crypto Bank Silvergate Cut to Underweight at Morgan Stanley Following FTX Collapse

Silvergate is faced with significant uncertainty about deposit flows in the near-term, said the analysts, estimating that Silvergate digital deposits are down 60% quarter-on-quarter so far in Q4. As clients withdraw their deposits the bank faces pressure on net interest margins (NIM) and net interest income (NII) as it needs to fund outflows with securities sales and more costly wholesale borrowing.