Customers of Silicon Valley Bank will now have complete access to their savings, according to the Biden administration. This remarkable decision by federal officials to support billions of dollars in uninsured money comes amid concerns that the bank's failure might trigger even more panic.

In the aftermath of Silicon Valley Bank's abrupt implosion, federal authorities said on Sunday that they were taking the necessary emergency measures to stop contagion at other local and small banks.

The Associated Press reported that the British Government and the Bank of England in the United Kingdom revealed early on Monday that they had helped smooth the sale of Silicon Valley Bank UK to HSBC, the largest bank in Europe. The action guaranteed the security of deposits worth around $8.1 billion. For the course of the weekend, British officials searched for a buyer for the California-based bank's UK business. The second-largest bank failure in history was caused by its demise.

According to sources, the U.S. rescue plan entails drawing from a sizable pool of government insurance funds that are financed by banks rather than using public money.

Customers of Silicon Valley Bank will have complete access to their funds as of Monday, according to the regulators.

"Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system," federal officials said in the statement on Sunday. "This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth."

#SVB #SiliconValley #Bank #bankingcrash

#ElonMusk the CEO of Tesla, offered his opinions on the continuing crisis brought on by bank collapses. This occurs amid intense criticism of the way regulators handle banks. The value of bank equities fell dramatically throughout markets as a result of the failure of #SiliconValley Bank and #SignatureBank in the United States as well as the most recent emergency merger agreement between #CreditSuisse and UBS Group. In the meantime, the cryptocurrency market exhibited inverse behavior to the macro trend driven by the news of bank crises.

In the meantime, Silicon Valley Bank, which is already functioning as a nationally chartered bank, is being acquired by the Federal Deposit Insurance Corp (FDIC), which is improving the bidding process for the acquisition. On Monday, the news of the Credit Suisse UBS merger caused a decline in bank and bond shares since investors in the riskier Credit Suisse bonds suffered significant losses because the agreement essentially caused the $17 billion worth of Credit Suisse notes to be written off.

Musk recently compared the bankrupt cryptocurrency exchange #FTX to Lehman Brothers, Credit Suisse, and Silicon Valley Bank in a tweet. This expresses his opinion on the devastating impact the failure of the Sam Bankman-Fried corporation had. The millionaire is well-known in the cryptocurrency community not just for his connections to memecoin Dogecoin (DOGE), but also for his strong relationships with CZ, CEO of Binance.

According to new data from Goldman Sachs, #bitcoin has outperformed traditional investment assets and industries, such as technology and gold, in year-to-date (YTD) absolute returns and risk-adjusted performance.

The top #cryptocurrency has outperformed the S&P 500 (+4%), Russell 1000 Growth (+10%), consumer discretionary (+11%), information technology (+16%), communication services (+15%), gold (+4%), and consumer discretionary (+11%) in terms of YTD absolute returns.

Crude oil and energy prices have fallen by 11% and 14%, respectively. Due to weaker fundamentals and broader market worries, oil prices have fallen to their lowest point since December 2021. OPEC+ and the #US will determine the market's floor.

The bellwether coin also showed good performance in terms of risk-adjusted returns, as indicated by its Sharpe Ratio score of 1.9. Compared to information technology (1.5), Nasdaq (1.4), and healthcare, this is higher (-1.1).

The rising chance that the US Federal Reserve would eventually abandon its aggressive monetary policy has been blamed for the recent increase in the price of bitcoin.

Since March 10, when regulators closed down #SiliconValley Bank, the value of cryptocurrencies has surged by 35%.

Despite the market analysts' predictions of a potential correction, Bitcoin's recovery has been more pronounced than that of Wall Street stocks, attracting the interest of investors.

In 2022, investor trust in cryptocurrencies was weakened by the collapse of Terra, FTX, and Celsis 3AC as well as global monetary tightening, with Bitcoin seeing a sharp decline.

Nonetheless, despite the continuous banking crisis, #BTC closed the week with a 34 increase, the best since January 2021, showing a narrative shift in the reputation of the biggest cryptocurrency.

After a terrible bear market, the cryptocurrency rally during the current banking crisis has been welcomed by desperate cryptocurrency investors, and some of them have argued that there is a change in how Bitcoin is viewed. Yet, fluctuations in inflation rates and the Federal Reserve's interest rate choices continue to have a significant impact on the price of Bitcoin.

To safeguard all depositors at #SVB in Santa Clara, California, the Federal Deposit Insurance Corporation (FDIC) has taken action. All deposits, both insured and uninsured, and nearly all assets have been moved to a brand-new, fully functional "bridge bank" run by the FDIC.

This morning, the brand-new #SiliconValley Bank, N.A., will reopen and resume regular banking operations, including online banking. Customers of Silicon Valley Bank, N.A. will automatically include depositors and borrowers. and have check writing, ATM, and debit card access to their money. The transfer of all deposits was completed under the systemic risk exception allowed on March 12, 2023.

Tim Mayopoulos was appointed CEO of Silicon Valley Bank, N.A. by the FDIC. He previously held the positions of president of Blend Laboratories, Inc. and president and CEO of the Federal National Mortgage Association. This will enhance recoveries for creditors and the Deposit Insurance Fund, safeguard depositors, and maintain the value of Silicon Valley Bank's assets and operations (DIF).

The purpose of the bridge bank structure is to "bridge" the time between a bank's failure and the point at which the #FDIC can stabilize the organization and put an orderly resolution in place. Senior management has been fired, and holders of some unsecured debt will not be protected. A special assessment on banks will be used to recoup any losses to the DIF from supporting uninsured depositors, as required by law.

All Qualified Financial Contracts of the defunct bank were also transferred to the bridge bank by the receiver for Silicon Valley Bank. By taking this step, depositors will be guaranteed complete access to their funds and be shielded from any damages resulting from Silicon Valley Bank's bankruptcy.

In recent news, data by CryptoQuant revealed a correlation between the collapse of Silicon Valley Bank (SVB) and the price action of Bitcoin.

On March 8, SVB announced a $1.8 billion loss on its bond portfolio, which caused panic among investors and a subsequent sell-off. The bank’s holding company, SVB Financial Group, experienced a crash in its stock price, and many customers began to withdraw their money, with a total of $42 billion attempted withdrawals.

The day after SVB’s announcement, Bitcoin price started trending downwards as traders began assessing the impact of the bank run and financial fallout. Bitcoin’s price drop continued until March 12 when a joint statement by the Treasury, Federal Reserve, and FDIC was released, providing a bailout to depositors and a program to protect other depository institutions. This statement injected more liquidity into the financial system, resulting in a positive impact on Bitcoin’s price.

On March 12, Bitcoin went on a tear from approximately $20k to over $26k in the next few days. Bitcoin eventually recorded a 9-month high of over $28k. The chart below shows the correlation between Bitcoin’s price action and the events at SVB.

This news highlights the interconnectedness of the traditional financial system and the crypto market. It also shows that Bitcoin’s price is affected by external factors beyond its control, such as the performance of traditional financial institutions. As Bitcoin continues to gain mainstream acceptance and become more intertwined with traditional finance, investors must be aware of potential external events that could affect the cryptocurrency’s price.

#Bitcoin #BTC #SVB #SiliconValley #azcoinnews

This article was republished from azcoinnews.com