Home > Daily > 🥛 Silvergate Sale: Everything must go
March 10, 2023

🥛 Silvergate Sale: Everything must go

GM. This is Milk Road. We're like the friend that just listens when you're talking about your ex for the 100th time. No judgment here.

Here’s what we're serving today:

  • Silvergate is a goner

  • Graph of the Day: Bitcoin whale withdrawals

  • Funding Friday!

  • Napoleon Dynamite goes Web3

Today's edition is brought to you by ConsenSys, so the Milk Man can read up on staking Ethereum withdrawals.

But before we get into all the good stuff, let’s talk about the P-word… prices. And since Monday, it's been a rough week for markets…

NASDAQ: – 3.75%

S&P500: – 3.42%

BTC: – 10.75%

ETH: – 10.23%

There was so much red I thought I was watching a Saw movie…

So, what happened? Big banks are going broke.

  • Silicon Valley Bank (the go-to bank for all the big tech companies) is in financial distress and is trying to sell $1.75B worth of shares to fix its balance sheet.

  • Silvergate Bank announced it is shutting down and liquidating its assets.

These are two massive banks, and we all know: Mo Money, Mo Problems.

The bigger the bank, the bigger the fall. The fear of two big banks going down bled into all markets and led to big sell-offs across the board. No one was safe.

OKAY, NOW SILVERGATE HAS CRASHED

It’s official. Silvergate is winding down its operations and will liquidate $11B in assets. This comes after it said last week that it was in a financial crisis and didn’t know if it’d survive the next 12 months…

*snaps finger*

Just like that, crypto’s go-to bank is donezo. Time to pour a glass of milk out for another fallen soldier…

Here’s why this matters: Silvergate was 1 of 2 major TradFi players that let companies move money in and out of the crypto market.

It served big customers like Kraken, Coinbase, and Gemini. Without that bridge, the market won’t function properly:

  • Exchanges will struggle to stay liquid. It’ll be harder to deploy fiat on their platforms without Silvergate.

  • Big banks may not step in as bridges. The government will make sure of that.

  • Digital asset inflows will slow. Without Silvergate making it easy to move $$$ into and out of the crypto world, volumes will decrease.

  • This will hurt mass adoption. Exchanges are the easiest way to dabble in crypto, so without Silvergate’s easy/quick platform, users may be turned off.

In other words: get ready to buy tickets, because here comes the sh*tshow. And it’s already begun…

What now? It’s gonna get ugly, but it isn’t complete D-Day just yet. There are still other players like Signature, a bank with $114B in assets (15% in crypto), to help on-ramp.

But it isn’t likely Signature’s gonna swoop in to save the day. It’s been pulling back from the crypto sector for months now and will keep pulling back.

We also might see some industry players form their own banks. Kraken recently said it’s creating the Kraken Bank (if you missed it, we covered it here.)

Either that or everyone will need to turn to sketchy, unregulated banks, which would be riskier for customers. And if you’re a budding crypto startup looking for a banking partner? Forget it.

Who knows what happens next, but the crypto market will hang in the balance of the few banks that stick around…

BE A PART OF WEB3 HISTORY WITH CONSENSYS

A big change is coming to Ethereum.

It’s called the Shanghai Upgrade and no, it has nothing to do with China or the city of Shanghai.

Ethereum is upgrading its infrastructure to enable ETH staking withdrawals.

What does this mean for stakers? What does this mean for Web3?

Our friends at ConsenSys have you covered.

They are offering a FREE report that walks through:

  • What is the Shanghai/Capella upgrade?

  • The role of stakers in Ethereum’s governance

  • Full and partial withdrawals

  • The impact of withdrawals on the Ethereum staking and DeFi ecosystems

  • Competition and innovation in the sector

  • Visit the Shanghai/Capella Upgrade hub to learn more.

In celebration of the upgrade, ConsenSys will also launch its second commemorative NFT collection,

Their first collection, The Merge Regenesis, was among the largest and most distributed NFT drops of all time.

Click the button below to claim your piece of Web3 history.

Sign up for the drop here

GRAPH OF THE DAY: BITCOIN WHALES WITHDRAW MILLIONS

Good crypto investors all share one hobby: whale watching. And no, I'm not talkin' bout Free Willy.

I'm talking about Bitcoin whales – the largest BTC wallets in all of crypto. They each hold 1,000+ BTC and have the power to move markets.

Well, check it out. Over the last 3 days, Bitcoin whales led the way with $350M in withdrawals from exchanges. Over $200M of that was withdrawn from Binance alone on Wednesday.

This is big because: It’s usually a bullish sign when Bitcoin whales take this much dough off of exchanges since that means they want to HODL, as opposed to leaving it on exchanges to sell.

That’s not always the case though. We’ve also seen exchange outflows amid dips in confidence in centralized exchanges.

So who knows what it is this time, but… fingers crossed.

FUNDING FRIDAY

We’re back with another round of Funding Friday. This week, Web3 companies raised $135M.

Here’s who secured the bag:

MatchDay got $21M to build soccer-themed Web3 games. And they partnered with FIFA and the GOAT, Lionel Messi, to make it happen.

Nealthy got $1.3M to create index products for NFTs and tokens. Don’t wanna research 213,732,873 different tokens? An index fund might be the answer for you.

EtherMail got $4M to encrypt wallet-to-wallet communication. Think of it as email for Web3.

REPUBLIK got $3.5M to develop a decentralized distribution platform for content creators. There’s an NFT marketplace, creator tokens, and other unique ways fans can engage with their favorite creators.

Check out the full database of companies that have raised money this year, right here.

MILK AND COOKIES

Planet Hollywood is teaming up with Web3 giant Animoco Brands to launch a real-life NFT club on LA’s Sunset Boulevard. It’ll cost ya $2,500 to join.

The Chair of the CFTC just called Ethereum a commodity, unlike the SEC, which thinks the asset classifies as a security. Gary G. you seein’ this? 👀

SBF’s lawyers said they might need more time to prep before the scheduled Oct. 2 trial. Sam might get some extra time playing “League of Legends” in his parents’ house…

The cast of “Napoleon Dynamite” is reuniting for an animated show called “Cyko KO” launching on blockchain platform Replay’s Web3 streaming service. You’ll need to own a “TV Star Card” NFT to watch the pilot episode.

MILKY MEME

🤣🤣

That's a wrap for today. Meet us on Twitter to talk all about it. It’s kinda like a family BBQ but better – no screaming kids, awkward photos, or drunk uncles telling weird stories (@MilkRoadDaily)

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.