Sunday, February 25, 2024
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Historic Baiout

This is a short post about what happened over the past weekend that made the whole market wobble and fluctuate continuously. Along with that is the general sentiment of investors from “we are so doomed” to “To the moon” in just a few hours **SI** Silvergate Bank is the first name to fall after the bank This delay in filing the Financial Statements with the SEC. Recording a loss of $ 1 billion in Q4/2022 only, cutting 40% of staff and many speculations about difficulties since the collapse of FTX have caused many of their major partners to terminate their cooperation. such as Coinbase, Kraken,… Finally, Silvergate must declare voluntarily liquidation of assets to return money to users and cease all operations. This is probably a move to avoid falling into excessive debt and bankruptcy of Silvergate **SVB** Next, after publishing its Financial Statements with its poor results, Silicon Valley Bank made to investors concerned about their current liquidity situation. The FDIC immediately closed this bank because of the risk of a possible large-scale Bank Run. It is worth mentioning that this is a fairly large Commercial Bank in the US (ranked 16) and the largest in Silicon Valley. Circle was immediately hit when it was announced that it had about $3.3b in deposits in SVB and apparently did not move it before the bank was closed by the FDIC and confiscated. A large-scale sell-off took place in the Crypto market, causing USDC to lose a heavy peg and many projects were significantly affected. Even so, Circle still affirms and assures investors about their financial status **Signature Bank** Even to the point, Signature Bank – one of the banks with the most active activity with the Crypto market on The world must also declare its closure and be confiscated by the FDIC to ensure the depositors’ assets. Like Silvergate, Signature faces serious effects in the context that 2022 can be said to be a terrible year for the Crypto market. They tried to find an acquisition partner or another solution to strengthen their financial situation before the new week, but it was unsuccessful. This marked the third largest bank collapse in economic history. The US was just behind SVB a few days ago and Washington Mutual in 2008. Along with that, First Republic Bank also had to apply for help about its predicament. All of these things led the US authorities to organize organized an extraordinary meeting to minimize the damage from the chain collapse of banks and ensure the interests of depositors. Finally, after the Fed, FDIC and the US Secretary of the Treasury met to discuss, the final statement was made. All deposits at SVB and Signature will be fully refunded when the bank reopens at the beginning of the week, whether the deposit is insured or not. However, the interests of Signature shareholders and non-preferred creditors will not be guaranteed, and the entire management of this virtual currency bank will be fired. Along with that, the Fed said it would inject more liquidity into financial markets through a new mechanism called the Bank Term Funding Program, the US Treasury said it would provide up to $25 billion from the Transaction Stabilization Fund. ESF) for the new Fed lending program if needed. Obviously, this is an unexpected good result for the Crypto market at the moment given concerns about Circle’s liquidity ability. The US financial markets also reacted quite positively and we went from “We’re so doomed” to “To the moon” in just a few hours. Besides, CZ also announced the conversion of its $1b BUSD hedge fund to BTC and BNB, which is quite positive news for the market at the moment. The bottom line affects the Fed’s monetary decisions in the near-term. CPI has had half a year of continuous decline, the unemployment rate has shown signs of increasing and “something breakdown” has taken place. All eyes will probably be on CPI data tomorrow, if everything goes well, perhaps we still have hope for the next wave. > Wishing you a happy new week

Source: Collector



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