What happened 

Shares of Coinbase Global (COIN 4.23%) fell as much as 11.1% in trading on Thursday after crypto bank Silvergate (SI 8.00%) said it is delaying its 10-K filing and gave a "going concern" warning. Silvergate stock crashed while Coinbase shares recovered late in the day and closed down just 1.5%. 

So what 

Silvergate has been under pressure for months because of losses on its crypto portfolio and a sharp drop in deposits. But the company continued to operate its core payments business fairly normally. 

That changed on Thursday when Coinbase, Paxos, and Galaxy Digital were among the companies who said they won't accept transfers from Silvergate's network. To be clear, this doesn't mean there's a risk to a company like Coinbase if Silvergate goes bankrupt. But that didn't matter to investors early this morning.

Coinbase is the custodian of some of the cryptocurrencies that Silvergate manages. That hasn't changed and even in the case of a bankruptcy filing, that business would likely continue. 

Now what 

Even if Silvergate goes bankrupt, I don't see much impact on Coinbase. The company doesn't have much financial risk related to Silvergate and like the collapse of FTX, it would likely be a bump in the road. 

What this could do is undermine faith in cryptocurrencies in general. Silvergate was a way to onboard institutional investors and this could hurt that trend. But Silvergate has also been struggling for months, so the impact may have already been felt. 

Despite Coinbase's drop today, this is more noise than substance for long-term investors.