The Silicon Valley Bank has collapsed, shaking the crypto & te | CEX.IO Broker

The Silicon Valley Bank has collapsed, shaking the crypto & tech industry

Bro, it's the thing we definitely should start the week with. Some call this the second-largest bank crash since Washington Mutual Bank in 2008, and it sounds true. So let's unwrap what's happened.

Silicon Valley Bank is the leading bank for the US startup industry (2600+ companies) and many crypto firms. On December 31, it had $209.0 billion in total assets and about $175.4 billion in total deposits.

On March 8, the bank released a financial update that showed it sold $21 bn worth of its securities holdings for a $1.8 bn loss.
March 9, SVB launched a $2.25bn share sale to raise additional capital.

Considering the situation with Silvergate Bank, people began to worry. Therefore, the bank's parent company shares slithered by 62%.

After, it was uncovered that five crypto-focused ventures advised portfolio companies to withdraw funds from SVB.
March 10 Nasdaq stopped operations with SVB Financial Group shares.
The same day, DFPI closed SVB and transferred the control to FDIC, which created the Deposit Insurance National Bank of Santa Clara to help the depositors.

The main startup driver has fallen, which may be a significant slowdown for the sphere. Not only because companies stored their operational cash there but also because of the loss of a substantial credit provider.

However, we're not finished yet.

$USDC has lost its peg and fell to $0.88. $DAI and $FRAX followed by $0.899 and $0.889.

March 11 Binance has temporarily suspended auto-conversion of $USDC to $BUSD.
Next, the USDC issuer Circle tweeted: "...$3.3 billion of the ~$40 billion of USDC reserves remain at SVB".
A bit later, Coinbase announced they paused USDC:USD conversions.

That caused a sharp price decline, leading to troubles for many others. For example, DAI was 54% backed by USDC, and here's why it was not the best idea.

All this means the financial entities must change to gain stability. So, probably, we'll see more control and less trust shortly. Would you like it or not, Bro?