/biz/ - Business & Finance

anyone shorting Silvergate Capital? ticker: SI

silvergate is a crypto bank. they lent michael saylor 700m$ via private senior secured debt which are SOFR-based priced @ SOFR + 3.7%. 200m$ of which is floating rate, so when the Fed hikes rates = higher rate saylor has to pay on this

silvergate also had deposits at FTX, which just filed for bankruptcy. SI say they only had 1bn$ of deposits at FTX and they had no loans to FTX. but this is a deposit story, not a loan story. if they lose all of their depositors, they'll have a run on the bank. they have no KYC and no anti-money laundering measures in place

if silvergate goes insolvent and has to go bankrupt - what happens to the 700m$ they lent saylor? will they recall the loan? that would force saylor to sell 700m$ worth of bitcoin to pay back silvergate who's in liquidation

FTX collapse =
bank run on Silvergate causing insolvency =
recall loans to saylor (MSTR) =
saylor has to sell 700m$ in bitcoin to pay silvergate back =
bitcoin price collapse =
MSTR's treasury, which is all bitcoin, collapses in value =
triggers more covenants on saylor's 2.4bn$ in outstanding loans he took out to buy bitcoin =
saylor has to sell ALL OF HIS BITCOIN 2.4bn$ worth to pay back lenders =

BTC PRICE COLLAPSE AND SENDS MSTR INTO TOTAL LIQUIDATION GOING TO ZERO

holy fuck we could see even more fireworks from all of this