higherthanexpected deposit withdrawals by customers at silvergate capital are ringing the alarm at jpmorgan analyst steven alexopoulos downgraded shares of the cryptocurrency company to neutral from overweight citing concerns as client deposits decline silvergate on thursday disclosed preliminary fourthquarter results that showed a 68 drop in total deposits as ftx erupted in scandal the company also shared a loss of 718 million as it sold 52 billion of debt securities to raise cash while the challenging backdrop for the crypto settlement business was a factor in the worse than expected results being released we also believe that concerns voiced by shortsellers on twitter likely also contributed to silvergates customers withdrawing deposits from the platform at a greater than anticipated level alexopoulos wrote friday the implications to the companys business from the significant reduction in client deposits has near as well as longerterm impacts he added thursdays news pushed shares down more than 42 on the day the stock fell another 17 before the bell on friday silvergate also shared plans to reduce its workforce by 40 while alexopoulos expects deposit balances to potentially normalize toward late 2020 levels the loss of confidence in crypto will likely to further pressure shares prices the sharp reduction in deposits may also force the company to hold higher levels of liquidity which could hurt profitability longer term with the landing point for deposits a wildcard as well as the eventual spread that the company could earn on those deposits also a wildcard the longterm earnings power of the company remains a question mark he wrote shares of silvergate plummeted more than 88 in 2022 and an additional 28 since the start of 2023 the banks revised 14 price target suggests shares could gain about 11 from thursdays close cnbcs michael bloom contributed reporting