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Silvergate Was a Payday for Short Sellers. They May Bear Some Blame for the Bank’s Collapse.
The collapse of Silvergate Capital stock went gradually, then suddenly, delivering a sizable payday to bearish traders who had bet against the crypto-focused bank. These short sellers may also bear some responsibility for what happened.
Silvergate (ticker: SI), once an influential provider of financial services to the digital asset industry, announced on Wednesday the bank planned to voluntarily wind down operations and liquidate. The stock dropped 37% between Tuesday and Thursday, but that was only the latest leg downward for the shares, which had already tumbled 90% since early November, when the bankruptcy of crypto exchange FTX rocked the sector.