In this breaking news video, we discuss the latest developments in the cryptocurrency market, as Silicon Valley Bank and the stablecoin $USDC are experiencing a sudden and significant drop in value.
Silicon Valley Bank, a major player in the banking industry, has been a key partner for many cryptocurrency companies, providing financial services and support for their operations. However, recent events have caused concern among investors and traders, leading to a sharp decline in the bank's stock price.
At the same time, the popular stablecoin $USDC, which is pegged to the US dollar, has also experienced a major crash, causing many to question the stability of the entire cryptocurrency market.
Our expert analysts provide insights and analysis on these breaking developments, exploring the potential causes and impact of these crashes on the wider crypto market. Don't miss out on this critical news update that could have major implications for your investments.
Stay tuned for the latest updates and expert opinions on this rapidly evolving situation. Like and subscribe to our channel for more breaking news and analysis on the world of cryptocurrencies.
Silicon Valley Bank, a major player in the banking industry, has been a key partner for many cryptocurrency companies, providing financial services and support for their operations. However, recent events have caused concern among investors and traders, leading to a sharp decline in the bank's stock price.
At the same time, the popular stablecoin $USDC, which is pegged to the US dollar, has also experienced a major crash, causing many to question the stability of the entire cryptocurrency market.
Our expert analysts provide insights and analysis on these breaking developments, exploring the potential causes and impact of these crashes on the wider crypto market. Don't miss out on this critical news update that could have major implications for your investments.
Stay tuned for the latest updates and expert opinions on this rapidly evolving situation. Like and subscribe to our channel for more breaking news and analysis on the world of cryptocurrencies.
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NewsTranscript
00:00 A bank run just happened in 2023.
00:05 This is a huge breaking story right now, and we're going to walk you through all the details.
00:10 My name is Gav Blacksburg, aka Wolf Financial.
00:12 I'm here with Evan from Stock Market News.
00:15 If you enjoy these type of videos, make sure that you like the video, subscribe to the
00:18 channel.
00:19 We're about to get into some crazy details.
00:22 Let's start off by just putting this in perspective.
00:24 Evan, what are we looking at here?
00:26 Yeah.
00:27 So we are currently looking at a chart showing that Silicon Valley Bank is the second largest
00:32 FDI insured bank failure in US history based on total assets.
00:37 Washington Mutual Bank in 2008 was the largest one.
00:41 You don't want to be pulling very close to 2008 on much stuff, I would imagine, but just
00:46 shows the scale.
00:47 We'll get right into it if you actually go up on the slide, Gav.
00:50 I think you're on slide two instead of one.
00:52 But SIVB has officially been shut down by California regulators.
00:57 SVB Bank fails as FDIC takes over.
01:01 The interesting point on this one is the nature of the bank.
01:05 Silicon Valley Bank, I didn't really know much about it before this, but you kind of
01:08 learn very quickly.
01:10 They work a lot with VC startups and companies and everything like that.
01:14 97% of the money at that bank was more than $250,000, which is the FDIC insured limit.
01:24 So you could tell that a lot of that stuff will not be insured.
01:30 I think that's pretty good on this one.
01:31 We can talk a little bit more about how this actually came about.
01:34 Bloomberg put a pretty good article where it kind of shows what's been happening over
01:38 the last two days.
01:39 It's kind of crazy how quickly this did go down.
01:42 Investors and depositors tried to pull $42 billion from the bank on Thursday, one of
01:48 the largest bank runs in more than a decade.
01:52 That left the bank with negative cash reserves of $958 million.
01:56 So I mean, being able to pull out $42 billion, that's a pretty massive number.
02:00 And what we just saw in the last slide, they had about $209 billion of assets.
02:04 So just some quick math over here.
02:09 20% of the banks' assets were taken out in one day.
02:13 That's pretty crazy.
02:14 We'll talk a little bit more about it.
02:17 But yeah, do you have any thoughts or anything like that?
02:19 We can maybe get on to the next one too.
02:20 Yeah, just a massive bank run.
02:22 This obviously affected a bunch of other banks.
02:24 We saw First Republic Bank, their stock crashed about 50%, 20 minutes into the open yesterday.
02:31 And we saw a bunch of other banks like JP Morgan, certainly getting attacked in the
02:34 stock market.
02:38 We kind of saw this come out earlier this morning, but in the middle of last week, Moody's
02:43 apparently said that they were going to downgrade the bank.
02:47 And that kind of sparked all this.
02:49 We were kind of talking about making another video going deeper into everything that happened
02:53 here and kind of how we got to this point.
02:55 But I saw this morning, and it wasn't really kind of coming in and out and reported before,
02:59 that this might have been kind of the domino that pushed us over the edge in this case.
03:03 But do you have any other thoughts or interesting kind of how we got to this point, Will?
03:08 Well, I think, you know, Silvergate was also really a big story.
03:12 And we saw their stock crash heavily.
03:13 We saw them kind of getting liquidated.
03:16 And it became curious, you know, is anybody else going to have any attachment to this
03:18 feeling like it all kind of tracks back to FTX.
03:21 But I think the big story of this morning was caused by this meltdown.
03:26 And it's what a lot of people are really getting, starting to pay attention to, especially in
03:29 the crypto world.
03:30 And that was this USDC breakdown that we are seeing today, first time in three years that
03:36 it's really moved away from the dollar.
03:39 This came out last night and was reported that the crypto firm Circle, which backs USDC,
03:45 revealed $3.3 billion of exposure to Silicon Valley Bank.
03:48 Looks like they are unable to get a lot of that money out.
03:52 And that is causing the stablecoin to de-peg from the dollar.
03:56 It moved down all the way to a low of, I think, 87 cents, which is obviously really, really
04:01 bad when it's supposed to be staying at a dollar.
04:03 It's supposed to be super stable in that ecosystem.
04:05 And there's so many things that are backed by USDC and a lot of people that were holding
04:09 it as an alternative to the dollar and as an alternative to more untrustworthy stablecoins
04:15 per se, like Tether.
04:17 Any thoughts on that, Evan?
04:20 If you want me to be real, I don't think it's any of the effect.
04:23 I think it's much more of the cause on this whole crypto area.
04:25 I don't think it really matters that much in the grand scheme of things of the financial
04:29 world.
04:30 If I am being real, I think if you go back up, the impact that I thought was a lot more
04:34 interesting here is kind of like what we're going to see next week and maybe coming.
04:38 And I obviously care a lot more about stocks.
04:40 So Roku, they said that they had about 26% exposure to that on their cash reserves, about
04:47 $487 million, which is a lot more than the $250,000 FDIC insured limit.
04:52 So you can see that when the Roblox also had about $150 million at the bank.
04:58 There's going to be a lot of impact and fallout coming from this.
05:01 Tether though is really seeing it right here and you could see they had a $3.3 billion
05:05 exposure.
05:06 How big is USDC's reserves?
05:07 I kind of want to say a number like 36 billion, but I don't want to just throw something random
05:12 out there.
05:13 I feel like I saw that recently.
05:14 Maybe that was Tether though.
05:15 Yeah.
05:16 USDC, I believe has a $40 billion reserve and $3.3 billion of that was at Silicon Valley
05:23 Bank.
05:24 That's a good amount of money.
05:25 That's a good amount of part of it.
05:26 It might even be that like 8% that really went down.
05:29 So you can see that move.
05:31 A lot of stuff has to be worked and fixed in the next 48 hours, 24 hours or else there
05:36 could be the end of some of this stuff.
05:38 I think this and these stable coins are interesting for me.
05:42 Every single one that's considered safe ends up falling in the end.
05:46 So I have no idea.
05:47 We'll see on this one.
05:48 But like some people are talking about like the banks going down and whatever.
05:54 But this is one small regional bank that really played a specific niche where you can kind
05:58 of see this happening in this market.
05:59 And I don't know if it is a full kind of representation of the entire market.
06:04 So it is interesting for me to see these kind of crypto people kind of talking theirs up
06:09 when Bitcoin and all this exposure is there as well.
06:12 I still think everything is extremely risky at this point, but we'll see.
06:16 We'll see if Jerome Powell cares about it as well.
06:18 But I think we're pretty good to move on to the next slide.
06:20 I think there's a lot more companies that could be affected than even just the ones
06:23 we talked about.
06:24 Silicon Valley held some stocks.
06:26 They put in a 13F like some other institutional investors.
06:30 There was a couple other names on here, but these were the ones that I kind of thought
06:33 people would care about.
06:34 Planet Labs is a little self-serving at the end.
06:36 But Coinbase is a large name of 406,000 shares held by them.
06:41 Okta had 112,000 shares.
06:43 Yeah, it's also a large name.
06:46 And Skillz, I know, became a little bit of a popular fin twit name.
06:49 Not one that I thought a bank would be holding.
06:51 There was a couple other companies that they did hold that it was like 6, 7, 8% of the
06:55 company.
06:56 So definitely we'll have to watch out for those and how those move.
06:59 A little bit of risk there.
07:00 But yeah, I think this is just kind of another second layer effect of what was happening.
07:05 Yeah, absolutely.
07:07 Pretty tough to see some of these stocks that are going to be affected.
07:11 Everybody's kind of looking forward to this open on Monday.
07:14 And also, I think it was a great point that you made.
07:16 The stock chart for USDC does basically perfectly reflect the assets that are missing at the
07:22 moment.
07:23 All right, here we have one more or two more pieces of data that we're just going to show.
07:28 This was reported in the news.
07:30 Why you want to cover this real quick?
07:31 Yep.
07:32 So the S&P 500, a lot of people might not even known that Silicon Valley Bank was in
07:37 the index, but no longer.
07:38 It is being replaced by Insulet PODD before the markets open on Wednesday.
07:44 I think this kind of goes to the underlying aspect of like why this passive investing
07:49 and diversification in something like the S&P 500 is good.
07:53 This isn't an Apple, this isn't a Microsoft, this isn't a 10% of the index going down.
07:58 One of the names just went bankrupt kind of in the last 48 hours.
08:03 A lot of people maybe in hindsight said they can see it coming, but I definitely didn't.
08:08 And the index is okay.
08:10 It's going to rebalance and in the long term, this will have a negligible to absolutely
08:14 no effect on it.
08:16 So watch out for this.
08:18 PODD will be added to the index.
08:20 Maybe that gets some movement off of this.
08:22 But yeah, I think this is a pretty good case of why you kind of maybe go in these diversified
08:28 areas of the indexes like this.
08:31 Moving on to the last slide, I thought this one was a little bit more me-me and a little
08:34 bit more funny.
08:35 But if you look at the chief administrative officer, Mr. Joseph Genitilli, Genitil, I
08:41 don't know.
08:42 I feel like I had it right in the first one closer.
08:45 But he was the former CFO of Lehman Brothers, which, you know, there are means to be made
08:49 for everything.
08:50 But CFO of Lehman Brothers, that one, that one's a little bit crazy.
08:55 Yeah, absolutely.
08:57 We've seen the chief risk management officer of Lehman Brothers, I believe, involved with
09:01 other similar cases.
09:03 So yeah, pretty crazy to see the fallout that's continuing.
09:06 And just nuts to put in perspective that this is much bigger than Lehman Brothers, which
09:11 kind of shocked the world at the time.
09:13 Question being so many questions to answer here, right?
09:15 Do we see another bank meltdown?
09:18 Do we see other banks fail from this?
09:20 Do we see, you know, other lenders become much more hesitant?
09:25 There was a stat, which we did not cover so far in this, but it was that a very, very
09:29 high number of U.S. venture capital-based, backed companies have exposure to Silicon
09:37 Valley Bank.
09:38 It was an extremely, exorbitantly high number.
09:40 It was above 60, 70 percent, I believe.
09:42 So pretty crazy to think what the fallout could end up being from that.
09:46 Yeah, 100 percent.
09:48 I know we have also a video that we want to go and watch in a second, just kind of showing
09:52 the bank run.
09:53 So we'll go to that.
09:54 But I definitely do agree with you.
09:55 I definitely saw that stat that you were talking about that maybe not right now, but in general,
10:00 so many of these startups and companies have had exposure to this bank.
10:04 I think it kind of goes to like what this bank is.
10:07 And I think a lot of people wouldn't have known it before, unless you're in that community,
10:10 just because like, you know, I'm a person, average person doesn't really kind of look
10:15 into that stuff.
10:16 But the exposure is quite large.
10:18 And we'll see a lot of this stuff, how it shakes out.
10:21 It's interesting because a lot of these VCs who are most effective, they kind of started
10:25 the bank run in a little bit.
10:27 Now, obviously, there was underlying events and everything that happened that caused it.
10:30 So they didn't cause the bank run, but they were definitely the first ones to move out.
10:35 Here's the video.
10:36 Yes, speaking of bank runs, this is one of the SVB branches.
10:40 You can see here people lined up out the door trying to get their money.
10:45 Certainly a little bit of pandemonium being covered here.
10:49 So I think we covered this pretty well.
10:52 We don't want to speculate.
10:53 We really went over all the details that we have available to us at the moment.
10:58 With that being said, we are going to be making more videos coming from this.
11:03 If you haven't had the chance already to subscribe, go ahead and just click subscribe on the channel.
11:07 Make sure that you like this video.
11:09 We're going to be back pretty excessively throughout this week with updates because
11:13 who just knows how this is going to affect the stock market.
11:16 I personally had to move money around today to other places just to ensure safety and
11:21 security.
11:22 And we're going to do our best to keep you in the loop as well with a great understanding
11:25 of that.
11:26 So one more time, I'm Gav from Wolf Financial.
11:28 You just heard Evan from Stock Market News with us.
11:31 And we will be back shortly with another video.
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