Breaking: 2nd largest collapse in American history.Silicon Valley Bank Goes Bust - How Will This Affect Your Crypto Investments?🧵👇

1/I will break it down into:1️⃣About SVB2️⃣What happened3️⃣Crypto firms involved4️⃣Era of startup turmoil

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1️⃣About SVB

SVB, founded in 1983, is the 16th largest bank in AmericaIt expanded to many states and countries including Israel, Ireland and Germany, with $210 billion in assets,Supports SMB, with financial solutions that includes loans for acquisitions or projects.

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2️⃣What happened

SVB took strategic actions would take a $1.8 billion loss on the bond sales.Stemming from unfavourable macro environment.

4/These further exacerbated investors' fear:▪Sharp increase in interest rates over the past year▪Decrease value of bond investments.▪Balance sheet management errors from overallocation into long-term bonds▪Heavy exposure to tech sector

5/The ripple effects will be felt in SMB driven economy. Particularly, companies that are VC-backed relying on SVB for loans and holding their operating cash.Crypto firms tend to be heavily backed by VCs. Now, it's getting obvious how this affects crypto.

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3️⃣Crypto firms involved

📌Failed crypto lender @BlockFi has $227 million in funds held at SVB, not insured by FDIC📌Issuer of the world's second-largest stablecoin USDC, @circle. Claims that operations continues as normal. SVB was used to manage USDC's cash reserves,

7/📌@PanteraCapital may have an unknown amount of exposure to SVB's collapse. SVB is a custodian of its funds.📌@avalancheavax has $1.6 mil exposure to SVB📌@yugalabs claims to have "super limited exposure" to SVB

8/📌@proof_xyz, a leader in NFTs claims that potential loss wouldn't affect the security of customer's assets, or Proof's roadmap.📌@novalabs_ the startup behind decentralized network and internet provider @helium have an. undisclosed amount in SVB

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4️⃣Era of startup turmoil

@silvergatebank was the first to fall on 8th march. Later on, SVB started to show signs of trouble.This could put some crypto companies in the limbo as they now have restricted banking facilities.

10/Negative momentum is growing. USDC cut ties with @silvergatebank.It is unclear how far this contagion could spread within the VC back industry and also on a macro level.Final words: Diversification is important!

Source: https://twitter.com/arndxt_xo/status/1634414263434637312