Reasons for the current cryptocurrency market downturn: The closure of the US Silicon Valley Bank (SVB) caused Bitcoin prices to fall overnight. SVB, the US lender to startups, announced on Wednesday that it will sell shares worth $225 million to strengthen its balance sheet. One of their announcements spread among the bank's victimized customers and created panic among customers and investors. Then as the share price drops by more than half, customers are more likely to withdraw their money. Due to this, the Silicon Valley Bank (SVB) bank was closed.
to be more specific to the explanation
SVB privately invested customer balance into treasury bonds at 1%
when the bank run occured. SVB had to sell the treasury bonds to liquidate the bonds back into fiat to then honour withdrawals of fiat balance
the big problem is that the bonds market have ample bonds at higher %. so no one wants the 1% bonds. thus SVB had to sell them at a loss to liquidate them
meaning SVB did not get 1:1 value of bonds. thus made a loss meaning their SVB customer balance is no longer 1:1 of available fiat