In March, the cryptocurrency industry faced a significant test as three banks, SVB, Silvergate, and Signature, collapsed, causing a chain of events that once again highlighted the importance of securing stablecoins and gave momentum to the growth of Bitcoin.
The collapse of SVB was initially predicted by Byrne Hobart, the author of the economic mailing list The Diff, which has over 48,000 subscribers, including major venture capital investors.
Despite some initial skepticism from subscribers, the bank reported a $2.25 billion budget shortfall on March 8, leading to mass withdrawals and ultimately bankruptcy on March 11.
The closure of SVB led to anxious customers turning to Signature, but the bank also faced a wave of withdrawals and eventually closed due to “systematic risks” largely caused by regulatory authorities.
The collapse of these banks had a significant impact on stablecoins, particularly USDC and DAI. Many crypto companies terminated their relationships with Silvergate after it announced delays in reporting for 2022, and USDC Circle reported that $3.3 billion of its reserves were being held at SVB.
The bankruptcy of SVB led to a temporary panic in the market, causing the rates of major cryptocurrencies to fall by 10-15%. However, the launch of event-based futures contracts for Bitcoin on CME and the publication of inflation data in the United States that corresponded to the forecast led to a reversal in the trend, and Bitcoin and other cryptocurrencies began to grow again.
During this time, social media users actively speculated on the idea that Bitcoin is the only true cryptocurrency and a safer option for storing savings compared to stablecoins, which are heavily dependent on the traditional financial system and collateral held in banks.
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