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SVB Debacle

Not just SVB. There have been 562 bank failures since 2000.




  • A larger bank comes in to acquire them, perhaps as soon as next week, and the situation will look like the WaMu case study.
  • But are more banks vulnerable to the effect of rising rates? In the 1980s, several banks failed during the Savings and Loans crisis, triggered by the Federal Reserve raising interest rates. SVB's collapse has echoes of the same period.

An Update on USDC and Silicon Valley Bank

  • While USDC can be used 24/7/365 on chain, issuance and redemption are constrained by the working hours of the U.S. banking system.
  • USDC liquidity operations will usually resume when banks open in the United States on Monday morning. As a practical matter, our teams are well prepared to handle the significant volume built on the solid liquidity and reserve assets discussed below.
  • USDC will remain redeemable 1 for 1 with the U.S. Dollar as a regulated payment token.

SVB Financial: Blow Up Risk (SIVB)

  • SVB Financial Group (NASDAQ: SIVB) is the holding company for Silicon Valley Bank. The company has carved out a niche as a leading commercial bank servicing technology and life science, many of which are early stages. The company benefitted mightily from the tech/biotech golden age of 2012-2021, with large deposit and loan growth in commercial banking, growth in its investment banking services, and gains in its equity and warrant investment portfolio. The company rode these gains to sector-beating ROEs.
  • While many of these tech bubble stocks have sold off quite a bit from their highs, many have severe threats to their underlying businesses, whose inherent weaknesses are being exposed as the tides roll out and funding dries up. SIVB was one of if not the most aggressive bankers to many start-up companies. That worked brilliantly in the VC funding boom but could cut the other way as the industry retrenches. So playing this company from the short side (via puts or shorting the stock) makes a lot of sense, particularly versus other banks that do not have the same tech exposure.

NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

  • Some Etsy sellers failed to get disbursements on Friday, and in a letter that a seller forwarded to EcommerceBytes, Etsy explained it was due to the Silicon Valley Bank (SVB) debacle