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Silicon Valley Bank and the crypto industry




In recent days, our team of analysts and traders has had several in-depth discussions regarding the current situation facing the global banking industry, and we have come to the conclusion that there is no conclusion.


SVB's bankruptcy was particularly overblown in the media, and few people have highlighted the fact that this bank had such low assets that not even assets available for sale were considered in Tier1. It was no coincidence that the regulators had not noticed the loss the bank was making due to the write-down of U.S. bonds. When start-ups and other cash-strapped tech companies demanded their money back, SVB had to sell its assets at a loss, and we already know the rest of the story.


If we think about it for a moment, this problem should not happen for large banking institutions, but in fact it should affect all smaller ones, including certain DeFi financial protocols. To clarify, where do you think the dollars that cover the value of a Theter are invested? Here is where the risk becomes real.


To summarize, the problem lies in the instability of bond market prices, and the only way not to create an apocalyptic environment is to make sure that these realities can manage to sell their assets at least at maturity, otherwise we can say goodbye to these realities and with them a lot of other businesses related perhaps to other activities.


What has happened to USDC should give pause for thought: do you think that the risks have disappeared just because stablecoin has reached peg? The risks have not disappeared at all, only the capital loss of those who had USDC in their portfolios has disappeared.


Those who question whether the crypto sector or the traditional sector is better are asking the wrong question because apparently one is strictly dependent on the other, as our team has been trying to make maximalists understand for years.

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