Metropolitan Bank: deposits of cryptocurrency companies are significantly reduced

According to a report by Metropolitan Commercial Bank, the volume and number of deposits of cryptocurrency companies throughout thelast year is steadily declining.

As stated in the presentation sentto investors, since the end of 2018, the volume of such deposits decreased by 52% and reached the level of $ 104 million by December 31, 2019. At the end of 2018, they accounted for 13% of the total, and at the end of 2019 already 4%.

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Metropolitan is one of several banks that openly work with companies from the cryptocurrency sector.The presentation provides a list of its clients, which includes the Bitpay processing service, the Crypto.com platform, the Coinbase exchange, and a brokerVoyager.Despite this, the cryptocurrency direction is showing increasingly low results.So, in the second quarter of 2018, the volume of deposits of cryptocurrency companies amounted to $369 million.

Negative dynamics to some extent canbe associated with a worsening market situation. Also, do not forget about the growth of competition in space, with which a few years ago no one wanted to interact. For example, cryptocurrency deposits of Silvergate's rival Metropolitan bank didn’t decline so quickly - only 22% per year. As of September 30, 2019, the volume of such deposits at Silvergate amounted to $ 1.29 billion. On Wednesday, new statements will be presented for the fourth quarter.

Over the same 12-month period, the number of cryptocurrency clients in La Jolla, California, increased from 273 to 756, accounting for 70% of the bank’s $ 1.8 billion deposits.

Banking analyst Christopher O’Connell said that Metropolitan has lost some of its customers out of the blue.

“More and more are entering this space.”competing banks, in connection with which it is necessary to adjust interest rates. But if the bank has a reliable source of deposits, then it may not be willing to fight for a larger share in this business. ”

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