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 started. SVB had to sell the treasury bonds to liquidate the bonds back into fiat to then honour withdrawals of SVB customer fiat balance
the big problem is that the bonds market have ample bonds at higher % to trade. 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
A bit oversimplified but yes. There are a lot of other issues, but that is the one that caused the implosion so to speak.
If you are driving fast, on a wet road, with bald tires and bad suspension, did that pothole really cause the crash?
<shrug> does it really matter? People will keep putting money into the next big thing. From what I read even if USDC does take a hit from this from what I read they do have other insurance but getting accurate info now is kind of difficult.
-Dave