what this has to do with "crypto" in the first place?
Jeopardy: "A recent Silicon Valley-based bank that was a major player in providing fiat liquidity for the crypto exchanges" nonsense...SVB and signature had very little exposure to "crypto". The only one that had was Silvergate, which failed quietly. The rest failed because of the mismatch between withdrawals and declined value of holdings. You listen to MSM a bit too much, it seems. They call it this way to place the blame on us, but it does not "stick". Yep they did not ladder buy fed bonds as rates raised. Poor risk management banking 101 fail. So far, bitcoin is reacting as I hoped it would react. |
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I think anyone asking how these Silicon Valley-based banks could fail, first needs to ask which banks were involved in all the over-hyped California-based SPACs (that have all crashed and burned) over the last couple of years. Follow the fraud, follow the money. Here, I'll start: https://www.svb.com/blogs/silicon-valley-bank/why-spacs-nowEDIT: Continental put out a statement today about its hundreds of SPACS, says they are SaFu in JPMC, Citibank, or Morgan Stanley. https://www.spacinsider.com/news/headline-post/continental-spac-trust-accountsOf course, they don't say if they indeed once had the account funds with SVB or SB and simply moved them. Could've happened anytime within the last couple weeks/months/year for all we know. SPACs were complete fraud...at the later stages. I only put a few thou in them...one (from UK, the fooking Cazoo) lost 99% and one from US lost "meager" 40% (so far). |
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what this has to do with "crypto" in the first place?
Jeopardy: "A recent Silicon Valley-based bank that was a major player in providing fiat liquidity for the crypto exchanges" nonsense...SVB and signature had very little exposure to "crypto". The only one that had was Silvergate, which failed quietly. The rest failed because of the mismatch between withdrawals and declined value of holdings. You listen to MSM a bit too much, it seems. They call it this way to place the blame on us, but it does not "stick". |
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Which means in a bank that doesn't have enough cash on hand to cover all depositors, they will have even less now.
I'm just trying to figure out how Charles Schwab, a historical investment savings and loan bank, got shut down trading today. To the best of my fundamental understanding of Schwab, they are extremely crypto averse, and have questionable if any ties to the larger contagion. Shit is super fucked up today. what this has to do with "crypto" in the first place?...that s-t is completely unrelated and is primarily caused by the loan book losses due to the fast increases in interest rates. As now become apparent, FED told people in Dec 2021 that they would raise 1% in 2022. Instead, they did 4% or more. Accordingly, it becomes clearer why SVB bought MBSes yielding 1.5% in Dec 2021. Those are the securities they have 10% loss in, which gave them 2bil loss on a 20bil forced sell, which precipitated the whole shebang. I noted the SChwab, though, but they are trading now off the lows, only 10% down. |
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Have the cold from hell
Taking thirteen aspirins
Going back to bed
Actually I only took two, but I needed two syllables.
See you when I wake up.
" a few" would have done it  |
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Honestly, i don't even get the legality of it.
Say, you are a stockholder at the Signature bank.
Your stock is at $70 at the end of trading day on Fri, was trading freely all day, no halts.
Suddenly, this bank is "seized" on Sunday and you read the following:
"Shareholders and certain unsecured debtholders will not be protected", which means that your stock in this bank is suddenly worth ZERO.
No other explanation given. Is there any legal scholars to comment?
At this point, who would hold any other bank stock, apart from top 4 (JPM, C, BAC and WFC)?
all this is bullish for bitcoin, though. I think there can be legal actions to get more details but I don't really see the issue. The bank got bankrupt and in bankruptcy shareholders are screwed. If it was another kind of company that could continue doing business under bankruptcy protection, shares might hold some value, but apparently there is no bankruptcy protection for banks, which is understandable as we just saw that banks need trust, who is going to trust a bankrupt bank ? no evidence that Signature was bankrupt and NO ONE even alleged that. |
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Honestly, i don't even get the legality of it.
Say, you are a stockholder at the Signature bank.
Your stock is at $70 at the end of trading day on Fri, was trading freely all day, no halts.
Suddenly, this bank is "seized" on Sunday and you read the following:
"Shareholders and certain unsecured debtholders will not be protected", which means that your stock in this bank is suddenly worth ZERO.
No other explanation given. Is there any legal scholars to comment?
At this point, who would hold any other bank stock, apart from top 4 (JPM, C, BAC and WFC)?
all this is bullish for bitcoin, though. I think there can be legal actions to get more details but I don't really see the issue. The bank got bankrupt and in bankruptcy shareholders are screwed. Where is the evidence? Nobody said that it is bankrupt apart from some verbiage about "systemic risk". Signature bank seemed to be more stable than other regional banks on Friday. You people take "bankrupt bank" too much at the face value. It does not seem that it was, but it looks like it was shut down for dealing with "crypto companies' if i would be more specific. |
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Honestly, i don't even get the legality of it.
Say, you are a stockholder at the Signature bank.
Your stock is at $70 at the end of trading day on Fri, was trading freely all day, no halts.
Suddenly, this bank is "seized" on Sunday and you read the following:
"Shareholders and certain unsecured debtholders will not be protected", which means that your stock in this bank is suddenly worth ZERO.
No other explanation given. Is there any legal scholars to comment?
At this point, who would hold any other bank stock, apart from top 4 (JPM, C, BAC and WFC)?
all this is bullish for bitcoin, though.
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Sidenote: they closed Silicon Valley bank and ALSO the Signature bank, apparently (Silvergate closed last week).
Is there any bank left for Coinbase and Kraken to bank with?
I am not sure.
Coinbase have 5 other banks I read, SVB was just one of six. Probably why USDC is back to $0.99 before their banks open tomorrow despite you expecting much less than that. Not sure about Kraken, but doubt they'd be dumb enough to only be working with one bank, but time will tell. Generally speaking, major exchanges don't partner with only one bank for this exact reason... At least this isn't 2017 anymore. well, I expected 0.97 IF there would be no bailout (based on simple calculations), it is now 0.99 with a bailout, but it WAS almost exactly 0.97 before the bailout announcement. I cannot predict gov actions, sure, but I will look with interest at reg banks tomorrow. Not sure you can call it a "bailout". It's Circle's own corporate funds that are being put forward as liquidity for USDC. Pretty sure a bailout is when it comes from an external party. Unless you mean Circle are bailing themselves out? As I said before it's all very unsurprising given the situation. Circle have had to use 2 years worth of revenue in order to keep USDC afloat, because ultimately they only lost 8% with SVB. But sure, we'll see how it all pans out tomorrow. If 1:1 dollar redemptions aren't available, it's all going to go very wrong very quickly, I have no doubt about that. Meanwhile Bitcoin gives the impression of smashing through resistance levels like there is no tomorrow. $23K is the one to watch imo. Maybe i misread it, but washpo article reads like ALL deposits will be available, including unsecured one's like Circle $$ at SVB. Yes, Circle made noises about covering the shortfall if needed, but market did not believe it, hence the USDC price vacillating between 96 and 97c today; following that, fed made a non-secured deposit coverage announcement and it is then the USDC vertically jumped from around 97s to 99c and above. One thing is for sure...Bitcoin is looking good in this debacle. |
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Sidenote: they closed Silicon Valley bank and ALSO the Signature bank, apparently (Silvergate closed last week).
Is there any bank left for Coinbase and Kraken to bank with?
I am not sure.
Coinbase have 5 other banks I read, SVB was just one of six. Probably why USDC is back to $0.99 before their banks open tomorrow despite you expecting much less than that. Not sure about Kraken, but doubt they'd be dumb enough to only be working with one bank, but time will tell. Generally speaking, major exchanges don't partner with only one bank for this exact reason... At least this isn't 2017 anymore. well, I expected 0.97 IF there would be no bailout (based on simple calculations), it is now 0.99 with a bailout, but it WAS almost exactly 0.97 before the bailout announcement: https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/It is somewhat strange that USDT still has a 1% premium. I cannot predict gov actions, sure, but I will look with interest at reg banks tomorrow. |
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Sidenote: they closed Silicon Valley bank and ALSO the Signature bank, apparently (Silvergate closed last week).
Is there any bank left for Coinbase and Kraken to bank with?
I am not sure.
Regional banks might bounce up tomorrow, but then it might be like Lehman after it bounced up after Bear went under....same problems.
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New Zealand opened.  Down less than 0.4%...that's about....nothing. US legislators "like" to see Dow down 1000 points before they lift a finger, typically. I 'member it from 2008. |
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Man I stopped fighting buddy and all hell broke loose.
I will continue to not contest buddy and hope for a more interesting effect.
I will say this SVB appears to have been targeted with a massive run by depositors.
Wonder what Mon and Tues bring us
Unless I missed something SVB had most of its money in government bonds. That's supposed to be the safest thing, aside from just holding cash I guess. But people want returns, so the bank has to do something with the money. They only incurred losses because they had to sell these bonds at lower than face value. If a bank with the safest investments can be brought down by a bank run in a couple of days, what does that tell us about banks that invest in mortgages, corporate bonds, emerging markets ? They should have raised funds proactively, once Fed started to raise rates aggressively, but they waited and tried to raise funds only once they sold MBSes at a loss. As a result, market got spooked and they got hit with large amount of withdrawals. You are right, though, fractional reserve is fractional reserve, it is all based on confidence. However, the question for most is: withdraw where? Apart from bitcoin, as we learn from the last year the answer is probably: who knows? |
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Coinbase are planning to resume redemption 1:1 of USDC for USD, once banks are open again, so arbitrage will play out of buying USDC under $1 and selling 1:1 for dollar until the price returns to parity. Despite all the doom and gloomers out there expecting USDC to go to zero, the likelihood hood (right now) of that happening is very low. TL:DR: USDC de-pegging in this scenario isn't good or bad for Bitcoin, it's simply irrelevant. Coinbase is just being optimistic. i would be surprised if they do so, although some people have said that even in the WORST case scenario (no buyer for SVB), FEDs would immediately issue a 62% 'dividend' with eventual recovery up to 94%. So, it that case Circle gets 0.62X3.3=2.05 bil, with the shortfall "just" 1.254bil, which is about 3%, which later (1-2 years) becomes only about $200mil (6% of 3.3 bil). Since Circle is earning about 1.56 bil/year on it's Treasuries, it is a situation that theoretically should resolve positively. TL;DR If numbers are similar to what I posted, USDC might recover to about 0.97 by Monday. |
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Oh the money printer is still open for business, it's just that no one wants to borrow at 5+% rates. A return on nothing is still nothing. I describe it like this: "F-k around....and find out". |
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I never understood why people say that the collapse of stable coins would hurt Bitcoin in the short term. For me it seems just logical that Bitcoin would go up in price. I mean where else should the money from a collapsing stablecoin market go? A part into fiat but the rest would go into the next stable and most secure coin, which is Bitcoin. right now, it mostly went to tether, which is erroneus, IMHO. |
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I’ve started getting calls from friends, asking me how worried they should be about the current situation in crypto. I don’t know if that is a good thing as people are scared, and that signals the bottom, or if it is a horrible thing that we’re about to witness a global 2008 style collapse in all assets. My hope is that this is the time to buy when there’s blood in the streets but we will see.
Apart from the Circle, the area most affected is the venture capital, which is mostly nothing to do with "crypto". So, you can tell them that reckless FED just shut down the world's engine of innovation, but yes, pizza and Coca-Cola are unaffected. IMHO, collapse in all assets is more likely than not (or at least 50:50 chance), unless they manage to sell SVB to someone this weekend. |
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When I shorted ETH last week at 1652.04 I did it as a consequence of BTC failing to break the 200MA resistance. I was expecting BTC to confirm the technical double bottom of June 18th and November 09th one last time. Now all this wind of news and fud is catching my sails, still I believe the bottom is in technically - just needs one more confirmation. The only thing that has changed is that we are moving there faster now.  seems half of twitter is waiting for 12k-13k, I wonder if it will happen  good luck with betting on lower BTC prices when being already 72% under the ATH I think crypto twitter is pretty split right now. Maybe 40% expect a rebound from around $20K, another 40% still expect $12-14K with probably around 20% undecided. I say "still expect", but in reality they previously called for $10-12K and have since increased their bearish target by about +$2K. I imagine that with Bitcoin returning to $24K they will be calling for $16-18K again (increasing by +$2K again). If anything the bears are useful for one thing, being around $4K off the bottom each time. So based on this I'd estimate the lowest price goes is around $18K ($14K+4). Ideally it holds $19K for sake of continuing the uptrend, but this is also the bullish scenario too many are betting on, myself included. I'll look forward to $24K levels again, as I imagine another higher low around $22K ($18K+4) would be in play. Wouldn't bet on that too. We could see a confirmation of the technical double bottom already at 18k.
This I agree is more realistic than $12-14K right now. Turning previous resistance into support with a technical double rounding bottom is still a reasonable suggestion for now. Closed the CME "gap", not that I believe in this kind of thing being the utmost important. Partially OT: I am still 'amazed' as of how fast things went downhill at SVB. Wed stock at $267 and mostly flat Thu, a gap down, then plunge with stock ending at $106. Today-receivership, most likely a ZERO for stock holders, maybe a pittance. Apparently , they have above 180bil of assets and close to 170bil liabilities, so maybe depositors would get close to 100%, but it would take a long time for those with more than 250K deposits. |
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