Videos of bank runs and people lining up outside SVB. Rumblings that the contagion could spread to others as the market becomes fearful. We could see more dominoes fall of course and we’ll have to see this play out some more…but all things considered, BTC and ETH holding up relatively well.

SVB essentially bought a ton of mortgage-backed securities at a really bad time. They had to hold to maturity and only paid out little interest. When the Fed rose interest rates, the value of these MBSs tanked. People and companies holding money in SVB took out money (for a number of reasons), forcing SVB to sell their bonds at a loss. Then, of course, panic spreads as worries of the bank going insolvent circulate. This caused a bank run.

Notice how a bank run is literally impossible with crypto if you hold your keys in your own wallet.

Silicon Valley Bank is largest failure since financial crisis, billions stranded

submitted by /u/monkeyhold99
[link] [comments]

This post was originally published on this site