The sudden collapse of Silicon Valley Bank on Friday set off panic across the technology industry. But crypto executives and investors — who have endured a year of nearly constant upheaval — seized on the moment to preach and scold.
But the tone quickly shifted as a major crypto company revealed late Friday that it had billions of dollars trapped in Silicon Valley Bank. A so-called stablecoin designed to maintain a constant value of $1 suddenly dipped in price, sending shudders through the market. The debate is unfolding after a tumultuous year for tech companies in which the crypto industry entered a monthslong meltdown and some of the largest Silicon Valley firms conducted mass layoffs.
Silicon Valley Bank was in “sound financial condition prior to March 9,” according to an order from California’s Department of Financial Protection and Innovation. It became insolvent after investors and depositors caused a run on its holdings, the order said. Unlike other volatile cryptocurrencies, stablecoins are supposed to stay pegged at a price of $1. The uncertainty around Circle caused the price of its popular stablecoin, USDC, to plummet below $1 during trading Friday and Saturday, raising fears of another crypto industry meltdown. On Friday evening, the giant crypto exchange Coinbase halted conversions between USDC and U.S. dollars, citing the volatility in the market.
Go woke, go broke. Financial policies are important in a financial institution..just sayin…