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The decline in cryptocurrency prices follows Silvergate's decision to shut down

Shares of crypto-focused companies slumped on Thursday as Silvergate Capital Corp (SI.N) announced plans to wind down operations and voluntarily liquidate, as the fallout from FTX's collapse last year continues to ripple through the industry.

Experts estimate that the crypto lender's final liquidation might take one to two years, depending on how quickly outstanding loans are repaid and assets are disposed of.

Silvergate's latest move adds to a long series of high-profile crypto market failures since last year.

The company's shares fell 37% to $3.11, a day after reaching a new low, and have fallen 64% since March 1, when the company warned of a going concern risk.

“We believe this decision was made, at least in part, to help mitigate Silvergate Bank’s legal liability related to FTX’s bankruptcy,” Wedbush analysts wrote in a note.

Silvergate did not react quickly to a request for comment on the analysts' assessment.

Nevertheless, shorting Silvergate shares has proven successful for pessimistic investors, as the stock has lost 95% of its value in the last year and 72% so far this year.

According to analytics firm S3 Partners, about 85% of the company's free float is under short position, with short sellers making $241 million in year-to-date mark-to-market profit.

Signature Bank (SBNY.O), a peer that has been shifting away from crypto since late last year, saw its stock drop 8%.

Signature said in its second mid-quarter update this month that digital assets represented for only 18.5% of its entire deposit amount.

Coinbase Global (COIN.O), a cryptocurrency exchange that severed connections with Silvergate last week, fell about 1%. Riot Blockchain (RIOT.O) and Marathon Digital (MARA.O) both fell 2.3%.

Bitcoin held steady at $21,711, near its lowest level since mid-February, with analysts and investors saying the news had little market impact because it was widely predicted.


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