Crypto-friendly bank Silvergate had a substantial footprint in crypto, and that meant it was under more pressure than traditional banking firms, said Jim Bianco, president and macro strategist at research firm Bianco Research LLC.

lSilvergate had to be perfect because of the industry they were in,r Bianco told CoinDesk TVrs lFirst Moverr on Thursday. lAnd they werenrt, and theyrve paid a heavy price for it.r

Before Silvergaters announcement, Bianco said, its holding companyrs stock (SI), which had fallen 98% since its peak in November 2021, was likely to fall even further.

lHistory says that stocks that lose this much often lose that final 2%,r he tweeted Wednesday when the Silvergate news broke.

By Wednesday afternoon, the La Jolla, California-based Silvergate Capital Corp. said that it would be lvoluntarily liquidatingr the bank's assets, in part due to lrecent industry and regulatory developments.r

Those recent industry developments can be attributed to the implosion of crypto exchange FTX and its corporate sibling Alameda Research, he said.

But the bigger problem for the crypto industry lies on the horizon, according to Bianco. Because traditional banking firms operate under a fiduciary rule, lthey have to act according to the fiduciary rule, responsibly.r

Fiduciaries have a primary duty of managing and caring for the property for others, according to Federal Deposit Insurance Corp. website, which adds, "The Board of Directors and senior management must be able to identify, measure, monitor and control the risks inherent in fiduciary activities, and respond appropriately to changing business conditions."

Now, thanks to the failure of Silvergate, coupled with the downfall of other crypto players, traditional finance (TradFi) companies could be taking on la career risk,r should they choose to invest their money in crypto.

lThis is the taint that crypto is going to have to face,r Bianco said. The crypto industry is likely to have a difficult time finding traditional banks that will work with it, and that will further stall TradFi's involvement in crypto. lAdoption from the TradFi space got just that much harder in the last 24 hours,r Bianco said.

But he doesn't think crypto isnrt down for the count. lI still think crypto is going to win the day at the end of all of this,r Bianco said.