The March 10th failure of Silicon Valley Bank (SVB) has sparked fear, uncertainty and doubt (FUD) throughout the crypto community, leading many to return to their crypto roots. The Bitcoin white paper, published just weeks after the 2008 Lehman Brothers meltdown, is back.
It’s truly amazing how many people fear that some banks have gone bankrupt. Someone please tell people why Bitcoin was created.
— Toby Cunningham (@sircryptotips) March 11, 2023
“There is a whole generation of builders who mock Bitcoin, only reading about Lehman and the financial crisis. Now their eyes are wide open. Welcome new friends.” said Messari Founder and CEO Ryan Selkis said:
in shock
That’s all
The speed at which all this is happening is unbelievable
— Meltem Demirors (@Melt_Dem) March 10, 2023
About six weeks after the dramatic collapse of Lehman Brothers, then the fourth largest investment bank in the United States, Satoshi Nakamoto released his now-famous white paper, paving the way for the emergence of the Bitcoin network. .
Some blame the SVB’s failure on rising US interest rates.federal reserve system gain Over the past year, the benchmark interest rate has exceeded 4.5%. This is his highest since 2007. US inflation was 6.4% in January.
Add ‘interest-rate-driven bank runs’ to the ever-long list of ‘things you didn’t expect to see in 2023’
— Sheila Warren (@sheila_warren) March 10, 2023
Many cryptocurrency and technology companies have been affected by the failure of Silicon Valley Bank. His SVB, a bank insured by the Federal Deposit Insurance Corporation, was about to go out of business when Circle, the issuer of USD Coin (USDC), began wire transfers to withdraw funds. I was there. Circle revealed that he was unable to withdraw $3.3 billion of his $40 billion reserves from SVB.
Less than 24 hours old and already experiencing its first bank run. pic.twitter.com/PjqGh1UAXg
— Michael Bentley (@euler_mab) March 11, 2023
Once USDC was depegged from the US dollar, the stablecoin ecosystem felt the effects immediately. The collateral impact of USDC has caused major stablecoin ecosystems to depeg from the dollar. Dai (DAI), a stablecoin issued by MakerDAO, has lost 7.4% in value due to the USDC unpegging, Cointelegraph reports.
stablecoin
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unstable coin— Cope (@Timccopeland) March 11, 2023
Other popular stablecoins such as Tether (USDT) and Binance USD (BUSD) continue to maintain a 1:1 peg with the US dollar.
Circle said it is now joining other customers and depositors in seeking continuation of SVB. This is what the company claims is important to the U.S. economy.Circle said on Twitter that it will follow guidance provided by state and federal regulators.
SVB was closed on March 10 by the California Department of Financial Protection and Innovation for undisclosed reasons. However, the FDIC only guarantees deposits up to $250,000 per depositor, per institution, and per ownership category.
