Silicon Valley Bank and the crypto industry, what is going on?
In recent days, our team of analysts and traders has had several in-depth discussions regarding the current situation facing the global banking industry, and we have come to the conclusion that there is no conclusion.
SVB's bankruptcy has been particularly overblown in the media, and few have highlighted the fact that this credit institution had assets of less than 250 billion and that Tier1 did not even include assets available for sale. It was no coincidence that the regulators had not noticed the loss the bank was making due to the write-down of U.S. bonds. When start-ups and other cash-strapped tech companies demanded their money back, SVB had to sell its assets at a loss, and we already know the rest of the story.
If we think about it for a moment, this problem should therefore affect all smaller entities, including certain DeFi financial protocols that are totally unregulated. To clarify, where do you think the dollars that cover the value of a Theter are invested? Here is where the risk becomes real.
In summary, the problem lies in the instability of bond market prices, and the only way not to create an apocalyptic environment is to make sure that these realities can manage to sell their assets at least at maturity, otherwise we can say goodbye to these financials and with them many other businesses, even if they are related to other activities.
What happened to USDC should give pause for thought: do you think the risks have disappeared just because stablecoin has reached the peg? The risks have not disappeared at all, only the capital loss of those who had USDC in their portfolio has disappeared, and that is not the same thing.
Similarly, it scares me to see the enthusiasm of "crypto experts" rekindled after the BTC pump. These top investors are too busy tweeting and insulting the mainstream to realize that this situation could devastate the decentralized sector. Those who question whether the crypto sector or the traditional sector is better are asking the wrong question because apparently one is strictly dependent on the other, as our team has been trying to make the maximalists understand for years.
SVB's bankruptcy has been particularly overblown in the media, and few have highlighted the fact that this credit institution had assets of less than 250 billion and that Tier1 did not even include assets available for sale. It was no coincidence that the regulators had not noticed the loss the bank was making due to the write-down of U.S. bonds. When start-ups and other cash-strapped tech companies demanded their money back, SVB had to sell its assets at a loss, and we already know the rest of the story.
If we think about it for a moment, this problem should therefore affect all smaller entities, including certain DeFi financial protocols that are totally unregulated. To clarify, where do you think the dollars that cover the value of a Theter are invested? Here is where the risk becomes real.
In summary, the problem lies in the instability of bond market prices, and the only way not to create an apocalyptic environment is to make sure that these realities can manage to sell their assets at least at maturity, otherwise we can say goodbye to these financials and with them many other businesses, even if they are related to other activities.
What happened to USDC should give pause for thought: do you think the risks have disappeared just because stablecoin has reached the peg? The risks have not disappeared at all, only the capital loss of those who had USDC in their portfolio has disappeared, and that is not the same thing.
Similarly, it scares me to see the enthusiasm of "crypto experts" rekindled after the BTC pump. These top investors are too busy tweeting and insulting the mainstream to realize that this situation could devastate the decentralized sector. Those who question whether the crypto sector or the traditional sector is better are asking the wrong question because apparently one is strictly dependent on the other, as our team has been trying to make the maximalists understand for years.
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