The Silicon Valley Bank (SVB) collapse on March 10 has sparked Fear, Doubt, and Uncertainty (FUD) in the crypto community, prompting many to return to their crypto roots, reviving the Bitcoin white paper published just a few weeks ago. after the Lehman Brothers crisis in 2008. .
It’s really amazing how many people are afraid that a couple of banks went down. Somebody tell these people WHY BITCOIN WAS CREATED.
—Toby Cunningham (@sircryptotips) March 11, 2023
“There’s a whole generation of builders who just read about Lehman and the financial crisis and scoffed at Bitcoin. Now, your eyes are wide open. Welcome new friends.” fixed on Twitter Ryan Selkis, founder and CEO of Messari.
in shock
that’s all
the SPEED at which all of this is happening is unbelievable
— Meltem Demiror (@Melt_Dem) March 10, 2023
About six weeks after the dramatic collapse of the US bank, Satoshi Nakamoto published the now famous white paper that paved the way for the rise of the Bitcoin network.
Some people blame the SVB’s failure on rising interest rates in the United States. the federal reserve increase its benchmark rate over the past year to more than 4.5%, the highest rate since 2007. In January, the US inflation rate was 6.4%.
Add “interest rate driven bank run” to the ever-long list of “things I didn’t think I’d see in 2023”
—Sheila Warren (@sheila_warren) March 10, 2023
Many crypto and tech companies are affected by the collapse of Silicon Valley Bank. SVB, a bank insured by the Federal Deposit Insurance Corporation, was about to shut down when USD Coin (USDC) issuer Circle initiated a wire transfer to withdraw its funds. Circle revealed that it was unable to withdraw $3.3 billion of its $40 billion reserves from SVB, causing a sell-off and the stablecoin’s price falling below its $1 peg.
Less than 24 hours and you’ve already experienced your first bank run. pic.twitter.com/PjqGh1UAXg
—Michael Bentley (@euler_mab) March 11, 2023
The stablecoin ecosystem felt an immediate effect when the USDC decoupled from the US dollar. The collateral influence of the USDC caused the major stablecoin ecosystems to turn away from the dollar. Dai (DAI), a stablecoin issued by MakerDAO, lost 7.4% in value due to the decoupling of the USDC, Cointelegraph reported.
stablecoins
stablecoins
stablecoins
stablecoins
stablecoins
stablecoins
unstable coins—Cope (@Timccopeland) March 11, 2023
Other popular stablecoins such as Tether (USDT) and Binance USD (BUSD) continue to be pegged 1:1 to the US dollar.
Circle said it now joins other clients and depositors in calling for the continuation of SVB, which the company says is important to the US economy. Circle stated on Twitter that he would follow the guidance provided by state and federal regulators.
SVB was shut down by the California Department of Financial Protection and Innovation for undisclosed reasons on March 10. The California watchdog appointed the Federal Deposit Insurance Corporation (FDIC) as a trustee to protect insured deposits. However, the FDIC only insures deposits up to $250,000 per depositor, per institution, and per ownership category.
