Dogecoin Price Prediction as $500 Million Trading Volume Floods In – Are Whales Buying?
Investors are delicately walking on eggshells following a series of events with the potential to alter the direction of the entire market for weeks—and possibly months. The largest meme coin by market capitalization bowed to the massive overhead pressure during the weekend.
Panic reverberated across the market as reports of another bank collapsing – the second in March. Silvergate, a United States-based crypto bank was the first to announce its financial troubles after its capital position weakened significantly from the previous monthly report to the Securities and Exchange Commission (SEC).
Meanwhile, the most recent and biggest blow to the crypto market is the collapse of Silicon Valley Bank (SVB). The 40-year-old bank and previously the 16th largest in the US has for a long time been at the epitome of technological advancement while catering to the financial needs of tech companies the world over.
However, a series of ill-fated investment decisions has seen it fall from grace, leaving regulators and governments with more questions than answers.
According to the Guardian, SVB’s downfall began when it made significant investments in US government bonds with long maturity periods, including those supported by mortgages, which were considered extremely secure.
Bonds and interest rates have an inverse correlation, meaning bond prices decrease when interest rates increase. As the Federal Reserve began to raise rates quickly to reduce inflation, SVB's bond investment suffered substantial losses.
SVB faced a shortage of liquid funds, which prompted it to sell its bonds at significant losses, leading to panic among investors and clients. The company's disclosure of the asset sale was followed by its collapse after only two days.
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