Silicon Valley Bank’s Bank Account Met Technical Error After Being Rejected  By Crypto Funds

Key Points:

• The project was urged by cryptocurrency investment firms to remove monies from Silicon Valley Bank. Mechanism Capital, Pantera Capital, Eden Block, and two other funds that requested anonymity.
• As Silicon Valley Bank is thought to be short on funds, crypto initiatives are attempting to reduce its impact.

After being rejected by Crypto Investment Funds, Silicon Valley Bank’s bank account continues to have technical issues.

Several crypto investment funds have requested that projects in their portfolios withdraw funds from Silicon Valley Bank, the US commercial bank rumored to be experiencing liquidity issues after it was revealed that it had to borrow money debt to get more money, and simultaneously sell the stock investment at a loss. Mechanism Capital, Pantera Capital, Eden Block, and two additional firms that preferred to remain unnamed are among the investment funds that confirmed the aforesaid facts.

The announcement that Silicon Valley Bank was stranded in money sent the US stock market and the crypto world into a frenzy early on March 10. SIVB’s share price has decreased by 60% in the last week. SIVB’s stock fell another 60% on the trading day of March 9, wiping almost $80 billion in market value.

Silicon Valley Bank is the 16th largest commercial bank in the United States, with 209 billion USD in assets as of the end of 2022. The situation began in 2021, when the bank observed a significant growth in client deposits from $ 61.7 billion to $ 189 billion. Silicon Valley Bank has agreed to spend $80 billion in long-term mortgage-backed securities to assure profitability (MBS). Nevertheless, when the Fed raised interest rates dramatically in 2022, the value of MBS securities fell sharply as market participants shifted to buy US government bonds.

On March 9, Silicon Valley Bank announced the sale of $21 billion in securities at a $1.8 billion loss. In order to compensate, the bank’s parent company intends to issue $1.75 billion in stock and has agreed to sell $500 million in stock to the General Atlantic fund. As a result, financial analysts think that Silicon Valley Bank is experiencing liquidity issues, resulting in a wave of withdrawals. Numerous crypto project founders reported that they were unable to access their Silicon Valley Bank accounts because the bank kept citing technical issues.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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