SVB Financial News

For much of the early part of 2023, the economy seemed to be humming along.

Main Street businesses and American families are likely to find it harder to get a loan because of turmoil in the banking industry, denting economic growth and raising the risk of a recession.

Silicon Valley Bank UK (SVB UK) has granted millions of pounds in employee bonuses, just days after it was rescued by global banking giant HSBC for just 1 pound, a recent report revealed.

The annualized fee income of leading decentralized finance protocol MakerDAO [MKR] has declined since the collapse of Silicon Valley Bank (SVIB) on 10 March, data from MakerBurn revealed.

As Bitcoin hits its highest level in nine months, many are wondering just how high the cryptocurrency can go. With a market cap of over $1 trillion and a surge in demand, as investors seek a safe haven amid economic uncertainty, Bitcoin's price has skyrocketed in recent months. 

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For much of the early part of 2023, the economy seemed to be humming along.

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Crypto investors pulled around $3 billion overall from the stablecoin USDC in three days, the company behind the token said in a blog post on Thursday, as investors rushed to redeem their holdings in the wake of the collapse of Silicon Valley Bank. USDC broke its dollar peg on Saturday after Circle revealed that $3.3 billion of the coin's reserves were at SVB. The stablecoin fell to as low as $0.88, according to CoinGecko data, but returned to $1 on Monday. Circle announced it would allow automatic USDC redemption through a new banking relationship, with Cross River Bank. Stablecoins are cryptocurrencies designed to maintain a constant exchange rate with traditional currencies. USDC is the second-biggest stablecoin with a market cap of $37.6 billion.

Bitcoin has regained strong bullish activity this week which has pushed it to a new 6-month high and a new YTD high. But the reason for this rally is far more interesting and may set the pace for Bitcoin’s performance for the rest of the year.

Crypto investors should know by now that it doesn’t take much to topple a distressed multi-billion-dollar firm. On March 10, California regulators officially shut down Silicon Valley Bank (SVB) 48 hours after the company disclosed it was in financial distress. As Cointelegraph reported at the time, SVB is the first Federal Deposit Insurance Corporation (FDIC)-insured bank to fail in 2023. That crucial detail prompted federal regulators in the United States to step up and backstop SVB depositors before a bank run could ensue. Although government protections weren’t enough to stem a massive drop in bank stocks once markets reopened on Monday, Bitcoin (BTC) and the broader crypto market soared. Did FDIC bail out Bitcoin? Only time will tell.

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In response to the turbulence in the banking industry, Johan Van Overtveldt, a member of the European Parliament and a former finance minister of Belgium, called for a ban on cryptocurrencies in a Friday tweet.

On one hand, Bitcoin (BTC) and other cryptocurrencies have started to thrive in the market. On the other hand, the picture is quite the opposite as far as the traditional banking system in the United States is concerned. Amidst the collapse of the banking system, SVB Financial group has announced that it is commencing bankruptcy proceedings.

There were only 11,440 active non-fungible token (NFT) traders on 11 March, the day after the Federal Deposit Insurance Corporation (FDIC) took control of Silicon Valley Bank (SVB). It was the lowest count since 20 November 2021.

Troubled SVB Financial Group has filed a voluntary petition for a court-supervised reorganization under Chapter 11 in the United States Bankruptcy Court to preserve value.

Signature Bank in particular served the likes of Paxos Trust and Celsius and other major crypto firms that suffered as a result of the decisions taken by the Federal Deposit Insurance Corporation and New York State Department of Financial Services.

WASHINGTON—Treasury Secretary Janet Yellen told lawmakers that the U.S. banking system remained in good health after the collapse of two midsize banks, saying that bank regulators’ depositor-rescue plan had stemmed fallout from the panic. 

Asia-Pacific banks are «resilient to risks» highlighted by failures seen in U.S. banking sector, Fitch Ratings said Thursday, adding the exposure to Silicon Valley Bank and Signature Bank is insignificant for regional banks the agency covers.

Michael Bennet, a United States Senator representing the state of Colorado, has suggested that banks that associated with crypto firms did not make “prudentially sound” decisions.

On March 11, the financial world was rocked by the sudden collapse of two major traditional banks, Silicon Valley Bank and Signature Bank. This triggered a series of events that impacted millions of businesses, venture capitalists, and bottom-line investors alike. One of the most significant effects of this collapse was the depegging of several stablecoins, including USD Coin (USDC), USDD (USDD), and Dai (DAI), from the U.S. dollar. Circle, the company that issues USDC, announced that $3.3 billion of its $40 billion reserves were stuck in SVB, causing the depegging of the stablecoins.