Mar 12, 2023
Big Banks Rush to Buy SVB Business, 50% of Uninsured Depositors Paid Out Next Week
The banking industry is abuzz with news of the collapse of Silicon Valley Bank (SVB), a prominent American tech bank. Just 72 hours after the news broke, relief efforts are already underway. Bob Elliot, chief investment officer of Unlimited Funds, recently made a post which revealed that “big banks are actively working on buying SVB business,” and that the U.S. Federal Deposit Insurance Corporation (FDIC) is planning to cover 95% of uninsured depositors to the acquirer. He further stated that “50% of uninsured deposits will be paid out next week.”
Insiders have been quick to confirm the news, with Hal Press, founder of investment firm North Rock LP, stating that “long term it’s likely that depositors get 90%+ back and very possible that no depositors lose a single $.” Mike Moïse, Associate Director of business advisory firm CrossCountry Consulting, also made similar comments, citing secondary sources. He said that SVB customers will have $250k unfrozen on Monday, and approximately 50% of the remaining balance will be distributed to depositors within 1-2 days. Any further recovery will be dependent upon future recoveries and is likely to take 3-6 months.
Cointelegraph reported earlier today that Circle, the issuer of the USD Coin (USDC) stablecoin, had over $3.3 billion in reserves stuck in the troubled bank out of a total of over $40 billion. In addition, SVB reportedly custodied an estimated $5 billion in funds for prominent blockchain venture capital firms such as a16z, Pantera Capital, and Paradigm. USDC depegged from its one-to-one U.S. dollar peg to trade as low as $0.87 apiece before slowly re-pegging to trade at $0.95 at the time of publication.
DeFi analyst Loki Zeng estimated that the net value of USDC is “$0.885 at extreme situation and $0.985 at normal situation” and commented: “even if there is an issue, it won’t be as severe as FTX.” Alex Svanevik, CEO of blockchain analytics firm Nansen, also said that the Circle and USDC “can make it,” so long as “top-class execution” is conducted in the next few days. Similarly, the DAI stablecoin, which is itself collateralized by over 3.1 billion USDC, has recovered most of its losses and is trading at $0.97 per coin at the time of publication. Maker DAO, DAI’s issuer, filed an emergency proposal amending protocol risk parameters in wake of the USDC depegging event.
The news of SVB’s collapse has had a ripple effect across the web3 space, with many crypto and NFT marketing agencies offering their services to help organizations and individuals affected by the collapse to promote and sell their NFTs. Twitter NFT marketing, in particular, has become a popular option for those looking to get their NFTs seen. With the help of a web3 agency, those affected by the collapse can establish a comprehensive NFT marketing strategy to ensure their NFTs are seen by the right people. This, in turn, could help them recoup some of their losses and ensure their NFTs are successful.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
