• The collapse of Silicon Valley Bank on March 10 has caused fear and doubt in the crypto community.
• Bitcoin was created just weeks after Lehman Brothers’ dramatic collapse in 2008, providing a decentralized alternative to traditional banking.
• Growing interest rates in the US and other factors have been cited as possible causes for SVB’s failure.
Silicon Valley Bank Collapses
The collapse of Silicon Valley Bank (SVB) on March 10 has sparked fear, uncertainty and doubt (FUD) across the crypto community. Many are turning to crypto roots, reviving the Bitcoin white paper published just weeks after the Lehman Brothers meltdown in 2008.
Why Bitcoin Was Created
Satoshi Nakamoto released the now-famous white paper shortly after Lehman Brothers’ dramatic collapse, creating a decentralized alternative to traditional banking. Ryan Selkis, founder and CEO of Messari stated: “There’s an entire generation of builders who only read about Lehman and the financial crisis and scoffed at Bitcoin. Now, their eyes are wide open.”
Potential Causes for Collapse
The Federal Reserve increased its benchmark rate over the past year to more than 4.5 percent — the highest rate since 2007 — which may be one factor in SVB’s failure. Additionally, inflation rate in US is 6.4 percent as of January this year.
Companies Affected by Collapse
Many crypto-related companies are affected by this collapse due to their reliance on traditional banking systems for operations such as payments and investments processing.
The SVB failure is a reminder that it pays to be prepared for unexpected events like these — especially when it comes to finances — something that cryptocurrencies were designed with at heart: decentralization and trustlessness among its users without relying too much on central governing bodies or institutions like banks or governments.