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Niche banks continue to fall apart. The Silvergate failure is being followed by Silicon Valley Bank (SVB), which collapsed on March 10.
After a failed attempt to raise capital, SBV has been taken over by the Federal Deposit Insurance Corporation (FDIC). The bank will be sold or liquidated.
In heavy trade on March 10, Signature Bank is on the rocks. It is down 21.11% at press time at $69.65, but traded near $61 earlier in the day from a previous close of $90.76. Much like SVB did earlier in the week, Signature is denying that it has any capital issues.
While these banks are small, the impact they are having on global markets is noticeable.
According to a recent disclosure, Circle held money with SVB, which only makes the ongoing stablecoin reserves saga more complex. Because SVB is now in FDIC control, the process of winding up the bank or selling it should be quick, but until it is done, whatever reserves Circle has with SVB are frozen.
None of this is good for cryptos, which are both emerging fintech, and a volatile asset.
Cryptos have come under strong selling pressure, with bitcoin falling below $20,000 for the first time since January. There is little doubt that the crypto markets are directly linked to capital flows in the legacy financial system, and in fact, cryptos may be a leading indicator for the direction of risk assets in the wider world of finance.
An ocean of liquidity, for some
Any market thrives or dies on access to liquidity, and cryptos are no different. On March 10, John Wu, the president of Ava Labs, said he thought that the SVB fiasco was a bank run. He turned out to be corr
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