SVB, Silvergate, Signature: 2008 Again?
Updated
Hi Traders, Investors and Speculators of the Charts 📈📉
Ev here, committed to keep you updated on the latest major event that's taking the world by storm: The recent collapse of three major banks: Silicon Valley Bank SSIVB , Silvergate Capital Corporation SSI and now Signature Bank
SBNY .
It has since came to light that many cryptocurrency companies had vested interest in thee bank including Coinbase, Circle and Ripple. Furthermore, over a dozen Chinese-based firms confirmed their exposure to SVB. Many other companies have since confirmed exposure including Roku ($487 million) , Etsy
ETSY , BlockFi and more.
Most recently:
🛑 HSBC agreed to acquires UK branch of SVB for 1 pound . Yes, yes you read that correctly.
🛑 Just a few hours ago, signature Bank, a New York financial institution with a big real estate lending business that had recently made a play to win cryptocurrency deposits, closed its doors Sunday after regulators said that keeping the bank open could threaten the stability of the entire financial system.
🛑 It comes to light that SVB executives sold large portions of their shares earlier in February:
- CEO George B. sells 11% on 27 Feb
- General Counsil Michael Z. sells 19% 5 Feb
- CFO Daniel B. sells 32% 27 Feb
- CMO Michelle D. sells 25% 1 Feb
Are we seeing some shocking similarities to the 2008 market crash? The global financial crisis of 2008 was caused by a complex interplay of factors, including the collapse of several major banks. Some of the notable banks that collapsed or were bailed out during the crisis:
1) Lehman Brothers: This investment bank filed for bankruptcy on September 15, 2008, after it became clear that it was heavily exposed to toxic mortgage-backed securities.
2) Bear Stearns: This investment bank was acquired by JPMorgan Chase in a government-backed bailout in March 2008, after it became clear that it was struggling to meet its financial obligations.
3) Washington Mutual: This savings and loan bank was seized by federal regulators in September 2008 and its assets were sold to JPMorgan Chase.
4) Merrill Lynch: This investment bank was acquired by Bank of America in a government-brokered deal in September 2008, after it became clear that it was heavily exposed to mortgage-backed securities.
5) Wachovia: This commercial bank was acquired by Wells Fargo in a government-brokered deal in October 2008, after it became clear that it was heavily exposed to risky mortgage assets.
These are just a few of the banks that experienced significant financial difficulties during the crisis. The collapse of these institutions had a profound impact on the global economy, leading to widespread job losses, foreclosures, and economic turmoil.
In case you missed the earlier updates and important facts:
In the past few weeks, there have been two significant bank failures in the United States that have sent shockwaves throughout the financial world. The collapse of Silicon Valley Bank and Silvergate Bank has sparked concerns about the stability of the banking system and the future of the crypto industry. The failure of these banks highlights the fragility of the financial system and the challenges faced by institutions that operate in high-risk sectors like tech and crypto.
Silicon Valley Bank ( SVB ) was closed by the FDIC on March 9 due to its heavy losses caused by the downturn in technology stocks and the U.S. Federal Reserve's aggressive plan to increase interest rates.
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the US Congress in 1933 to maintain stability and public confidence in the nation's financial system. The FDIC provides deposit insurance that guarantees the safety of deposits in member banks, up to a certain limit. In the event that a member bank fails, the FDIC will step in to insure deposits, provide assistance to depositors, and liquidate the failed bank's assets. The FDIC also regulates and supervises member banks, as well as conducts research and analysis on the banking industry.
Silicon Valley Bank bought bonds using customers' deposits, but the value of those investments fell as interest rates rose. This is usually not a problem for banks, but Silicon Valley Bank's customers were largely startups that needed cash. Venture capital funding was drying up, and companies were tapping their existing funds deposited with Silicon Valley Bank, which was at the center of the tech startup universe. In response to this liquidity crisis, SVB sold a 21bn bond portfolio at a loss of $1.8 billion. The bank attempted to fill the solvency hole with a combined equity offering of 2.25bn on March 8, but the attempt failed. This is the largest failure of a financial institution in the United States since Washington Mutual collapsed more than a decade ago. The closure of SVB had an immediate effect on some startups that had ties to the bank, as they scrambled to pay their workers and feared having to pause projects or lay off employees until they could access their funds. SVB , the 16th largest bank in the US, had assets of $209 billion, with more than 50% of its investments tied up in long-term securities, including exposure to the Silicon Valley tech and health startup world. The bank's sudden collapse has raised questions about its risk management practices, and the impact of its closure on its clients, who are largely startups and wealthy tech workers. The bank's large uninsured deposits and exposure to high-risk sectors like tech and crypto contributed to its downfall.
But SVB isn't the only one... Silvergate Bank, which has been a significant player in the crypto world, has announced that it is closing and returning deposits. The bank's holding company, Silvergate Capital Corporation, stated that the decision was made "in light of recent industry and regulatory developments." The closure follows the loss of one billion dollars in a quarter after customers withdrew $8.1 billion, and a subsequent filing in March revealing even worse financials. The closure of Silvergate Bank is concerning for the crypto industry, as it may lead to companies turning to less regulated institutions for their banking needs, potentially making the space even riskier. Coinbase, Crypto.com, and Paxos have already started moving away from the bank. The collapse of the bank will likely draw scrutiny from lawmakers who are concerned about the crypto contagion affecting the traditional financial sector. The Silvergate Exchange Network, which allowed crypto exchanges like Coinbase, Gemini, and Kraken to move money between themselves and other institutions, has also been shut down. The bank's financial struggles have been ongoing for some time, with some of its high-profile clients like FTX and Genesis also experiencing challenges. Silvergate's collapse raises concerns about the future of the crypto industry, as companies may turn to less regulated institutions for their banking needs, potentially making the space even riskier for everyone involved. The bank's failure is also likely to draw scrutiny from lawmakers concerned about the potential contagion of the crypto industry on the traditional financial sector.
Late Friday night Coinbase, a popular cryptocurrency exchange, announced that it would suspend conversions for the USDC stablecoin. This led to a rush of people trying to sell their USDC holdings, causing it to depeg from its value of $1 and trade as low as $0.87 before recovering to $0.92. Another stablecoin, Dai, also depegged and experienced a high volume of trading. Stablecoins are important in the cryptocurrency market as they provide a way for traders to move funds between different exchanges or cryptocurrencies without having to convert back to fiat currency. They are also used as a store of value by some cryptocurrency investors who prefer a more stable asset compared to the volatility of Bitcoin or other cryptocurrencies. If stablecoins depeg permanently, it could lead to a loss of confidence in their stability and reliability. This could potentially cause a sell-off of stablecoins and a shift towards other assets perceived as more stable, such as traditional fiat currencies.
But before we panic too hard and FUD out, it's important to note that the impact of this crisis on cryptocurrencies such as alts and Bitcoin would depend on the severity and duration of the stablecoin depegging event, as well as other market factors such as investor sentiment and regulatory actions. In the past, there have been instances of stablecoins temporarily depegging from their underlying assets without significant impact on the broader cryptocurrency market. One notable example of a stablecoin depegging in the past is the case of Tether (USDT) in 2018. Tether is a stablecoin that is pegged to the value of the US dollar , with each USDT token representing one US dollar . In October 2018, Tether's price dropped below the $1 peg on several cryptocurrency exchanges, leading to concerns about the stability of the stablecoin. The depegging was attributed to a variety of factors, including regulatory pressures, concerns about Tether's reserves, and a general market downturn. The depegging led to a sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD), which saw increased demand as traders and investors sought more reliable alternatives. Despite the depegging of Tether, the broader cryptocurrency market did not experience a significant impact, with Bitcoin and other cryptocurrencies largely unaffected. However, the incident highlighted the potential risks and uncertainties associated with stablecoins and their reliance on centralized institutions to maintain their pegs.
In terms of price action for the immediate term, the Tether (USDT) depegging event in 2018 did have some impact on the cryptocurrency market prices, although the impact was relatively limited and short-lived. Following the depegging of USDT, there was a brief sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD). This led to increased demand for these stablecoins, which helped to maintain their pegs to the US dollar . However, the broader cryptocurrency market, including Bitcoin , was largely unaffected by the Tether depegging. While there was some initial volatility and uncertainty, the market quickly stabilized and resumed its upward trend.
💭 Share your thoughts in the comment section and stay tuned!
_______________________
📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍
We thank you for your support !
CryptoCheck
Ev here, committed to keep you updated on the latest major event that's taking the world by storm: The recent collapse of three major banks: Silicon Valley Bank SSIVB , Silvergate Capital Corporation SSI and now Signature Bank
SBNY .It has since came to light that many cryptocurrency companies had vested interest in thee bank including Coinbase, Circle and Ripple. Furthermore, over a dozen Chinese-based firms confirmed their exposure to SVB. Many other companies have since confirmed exposure including Roku ($487 million) , Etsy
ETSY , BlockFi and more.Most recently:
🛑 HSBC agreed to acquires UK branch of SVB for 1 pound . Yes, yes you read that correctly.
🛑 Just a few hours ago, signature Bank, a New York financial institution with a big real estate lending business that had recently made a play to win cryptocurrency deposits, closed its doors Sunday after regulators said that keeping the bank open could threaten the stability of the entire financial system.
🛑 It comes to light that SVB executives sold large portions of their shares earlier in February:
- CEO George B. sells 11% on 27 Feb
- General Counsil Michael Z. sells 19% 5 Feb
- CFO Daniel B. sells 32% 27 Feb
- CMO Michelle D. sells 25% 1 Feb
Are we seeing some shocking similarities to the 2008 market crash? The global financial crisis of 2008 was caused by a complex interplay of factors, including the collapse of several major banks. Some of the notable banks that collapsed or were bailed out during the crisis:
1) Lehman Brothers: This investment bank filed for bankruptcy on September 15, 2008, after it became clear that it was heavily exposed to toxic mortgage-backed securities.
2) Bear Stearns: This investment bank was acquired by JPMorgan Chase in a government-backed bailout in March 2008, after it became clear that it was struggling to meet its financial obligations.
3) Washington Mutual: This savings and loan bank was seized by federal regulators in September 2008 and its assets were sold to JPMorgan Chase.
4) Merrill Lynch: This investment bank was acquired by Bank of America in a government-brokered deal in September 2008, after it became clear that it was heavily exposed to mortgage-backed securities.
5) Wachovia: This commercial bank was acquired by Wells Fargo in a government-brokered deal in October 2008, after it became clear that it was heavily exposed to risky mortgage assets.
These are just a few of the banks that experienced significant financial difficulties during the crisis. The collapse of these institutions had a profound impact on the global economy, leading to widespread job losses, foreclosures, and economic turmoil.
In case you missed the earlier updates and important facts:
In the past few weeks, there have been two significant bank failures in the United States that have sent shockwaves throughout the financial world. The collapse of Silicon Valley Bank and Silvergate Bank has sparked concerns about the stability of the banking system and the future of the crypto industry. The failure of these banks highlights the fragility of the financial system and the challenges faced by institutions that operate in high-risk sectors like tech and crypto.
Silicon Valley Bank ( SVB ) was closed by the FDIC on March 9 due to its heavy losses caused by the downturn in technology stocks and the U.S. Federal Reserve's aggressive plan to increase interest rates.
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the US Congress in 1933 to maintain stability and public confidence in the nation's financial system. The FDIC provides deposit insurance that guarantees the safety of deposits in member banks, up to a certain limit. In the event that a member bank fails, the FDIC will step in to insure deposits, provide assistance to depositors, and liquidate the failed bank's assets. The FDIC also regulates and supervises member banks, as well as conducts research and analysis on the banking industry.
Silicon Valley Bank bought bonds using customers' deposits, but the value of those investments fell as interest rates rose. This is usually not a problem for banks, but Silicon Valley Bank's customers were largely startups that needed cash. Venture capital funding was drying up, and companies were tapping their existing funds deposited with Silicon Valley Bank, which was at the center of the tech startup universe. In response to this liquidity crisis, SVB sold a 21bn bond portfolio at a loss of $1.8 billion. The bank attempted to fill the solvency hole with a combined equity offering of 2.25bn on March 8, but the attempt failed. This is the largest failure of a financial institution in the United States since Washington Mutual collapsed more than a decade ago. The closure of SVB had an immediate effect on some startups that had ties to the bank, as they scrambled to pay their workers and feared having to pause projects or lay off employees until they could access their funds. SVB , the 16th largest bank in the US, had assets of $209 billion, with more than 50% of its investments tied up in long-term securities, including exposure to the Silicon Valley tech and health startup world. The bank's sudden collapse has raised questions about its risk management practices, and the impact of its closure on its clients, who are largely startups and wealthy tech workers. The bank's large uninsured deposits and exposure to high-risk sectors like tech and crypto contributed to its downfall.
But SVB isn't the only one... Silvergate Bank, which has been a significant player in the crypto world, has announced that it is closing and returning deposits. The bank's holding company, Silvergate Capital Corporation, stated that the decision was made "in light of recent industry and regulatory developments." The closure follows the loss of one billion dollars in a quarter after customers withdrew $8.1 billion, and a subsequent filing in March revealing even worse financials. The closure of Silvergate Bank is concerning for the crypto industry, as it may lead to companies turning to less regulated institutions for their banking needs, potentially making the space even riskier. Coinbase, Crypto.com, and Paxos have already started moving away from the bank. The collapse of the bank will likely draw scrutiny from lawmakers who are concerned about the crypto contagion affecting the traditional financial sector. The Silvergate Exchange Network, which allowed crypto exchanges like Coinbase, Gemini, and Kraken to move money between themselves and other institutions, has also been shut down. The bank's financial struggles have been ongoing for some time, with some of its high-profile clients like FTX and Genesis also experiencing challenges. Silvergate's collapse raises concerns about the future of the crypto industry, as companies may turn to less regulated institutions for their banking needs, potentially making the space even riskier for everyone involved. The bank's failure is also likely to draw scrutiny from lawmakers concerned about the potential contagion of the crypto industry on the traditional financial sector.
Late Friday night Coinbase, a popular cryptocurrency exchange, announced that it would suspend conversions for the USDC stablecoin. This led to a rush of people trying to sell their USDC holdings, causing it to depeg from its value of $1 and trade as low as $0.87 before recovering to $0.92. Another stablecoin, Dai, also depegged and experienced a high volume of trading. Stablecoins are important in the cryptocurrency market as they provide a way for traders to move funds between different exchanges or cryptocurrencies without having to convert back to fiat currency. They are also used as a store of value by some cryptocurrency investors who prefer a more stable asset compared to the volatility of Bitcoin or other cryptocurrencies. If stablecoins depeg permanently, it could lead to a loss of confidence in their stability and reliability. This could potentially cause a sell-off of stablecoins and a shift towards other assets perceived as more stable, such as traditional fiat currencies.
But before we panic too hard and FUD out, it's important to note that the impact of this crisis on cryptocurrencies such as alts and Bitcoin would depend on the severity and duration of the stablecoin depegging event, as well as other market factors such as investor sentiment and regulatory actions. In the past, there have been instances of stablecoins temporarily depegging from their underlying assets without significant impact on the broader cryptocurrency market. One notable example of a stablecoin depegging in the past is the case of Tether (USDT) in 2018. Tether is a stablecoin that is pegged to the value of the US dollar , with each USDT token representing one US dollar . In October 2018, Tether's price dropped below the $1 peg on several cryptocurrency exchanges, leading to concerns about the stability of the stablecoin. The depegging was attributed to a variety of factors, including regulatory pressures, concerns about Tether's reserves, and a general market downturn. The depegging led to a sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD), which saw increased demand as traders and investors sought more reliable alternatives. Despite the depegging of Tether, the broader cryptocurrency market did not experience a significant impact, with Bitcoin and other cryptocurrencies largely unaffected. However, the incident highlighted the potential risks and uncertainties associated with stablecoins and their reliance on centralized institutions to maintain their pegs.
In terms of price action for the immediate term, the Tether (USDT) depegging event in 2018 did have some impact on the cryptocurrency market prices, although the impact was relatively limited and short-lived. Following the depegging of USDT, there was a brief sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD). This led to increased demand for these stablecoins, which helped to maintain their pegs to the US dollar . However, the broader cryptocurrency market, including Bitcoin , was largely unaffected by the Tether depegging. While there was some initial volatility and uncertainty, the market quickly stabilized and resumed its upward trend.
💭 Share your thoughts in the comment section and stay tuned!
_______________________
📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍
We thank you for your support !
CryptoCheck
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