• The Silicon Valley Bank collapse on March 10 has caused fear and uncertainty in the crypto community.
• Six weeks after the Lehman Brothers meltdown, Satoshi Nakamoto released the Bitcoin white paper.
• Many crypto and tech companies were affected by the collapse of SVB, particularly USD Coin issuer Circle.
Bank Collapse Sparks Fear in Crypto Community
The Silicon Valley Bank (SVB) collapse on March 10 has sparked fear, uncertainty and doubt (FUD) across the crypto community, leading many to return to crypto roots — reviving the Bitcoin white paper published just weeks after the Lehman Brothers meltdown in 2008. Ryan Selkis, founder and CEO of Messari.in stated “There’s an entire generation of builders who only read about Lehman and the financial crisis and scoffed at Bitcoin. Now, their eyes are wide open.”
Interest Rate Increase May be a Factor
Some people blame the SVB failure on the rising interest rates in the United States; The Federal Reserve increased its benchmark rate over past year to more than 4.5% — higher than 2007 levels. In January, U.S inflation rate was 6.4%.
Bitcoin White Paper Published After Lehman Brothers Meltdown
Approximately six weeks after Lehman Brothers’ dramatic collapse — then fourth largest investment bank in US — Satoshi Nakamoto released now-famous white paper paving way for emergence of Bitcoin network.
Circle Initiates Wire Transfer To Remove Funds
Many crypto & tech companies are affected by SVB collapse; Insured bank was about to shut down when USD Coin (USDC) issuer Circle initiated wire transfer to remove funds from SVB — they couldn’t withdraw $3 billion out of $40 billion reserves causing sell-off & stablecoin price dropping below its $1 peg.
Stablecoin Ecosystem Affected By Collapse
Stablecoin ecosystem felt immediate effect as USDC depegged from US dollar & other stablecoins followed suit resulting in market confusion that can have long-term ramifications for cryptocurrency industry as whole