The Fall of US Banks: Is Crypto Really to Blame?

in LeoFinancelast year
Well from the last couple of days we can be seen that in the market there are quite a lot of opinions or the fact that is been stressed by a lot of prominent people as well as many media outlets also is the fact that the banks have fallen due to the environment of Crypto into it or Crypto was the main problem mean issue find the fall of the banks that operate in the US.

Recently a couple of banks have taken a hit in terms of their operational capabilities as well as also needed to shut down completely but the fact that people are employing a trying to employee is that trip to currency or their involvement in Crypto has been one of the primary and for their demise.

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  • But do you really think that is the sole reason for all of this happening?

Well, basically silver Gate Bang is a bank that won down on March 8 with around 12 billion dollars in asset Silicon Valley Bank also went into the FDIC review ship on March 10 with over 200 billion dollars in assets required to shut down by the state regulators on March 12.

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The main reason why people are saying that cryptocurrency is the reason why these banks have taken it is that they used to have a lot of cryptocurrencies and also served more than others in terms of volume. Connection with many Crypto exchanges first quite significant in comparison to other banks more specifically the collapse of FTX was a major setback for these banks, especially SilverGate.

So at the end of the day silver Gate was kind of bankrupt and it was not much supported or encouraged by the US government as well not just because of Crypto but it was some other reasons as well and other and silver Gate had to liquid itself completely voluntarily and they have also made plans of full repayments of all the deposits.

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Just after a while silicon Valley Bank was also taken over by the FDIC, to be done as they were missing managing risks as well as also losing money by putting the customer's deposits in not-so-right financial securities and they were believed to be a bit too friendly towards crypto. What added fuel to already this burning fire of the demise of SVB is the attempt to sell 20 billion dollars of bonds over a weekend which and generated a loss after that they tried to raise some equity investment in order to cover off the losses but that failed.

And most recently like the other two banks another bank namely Signature was also shut down by the state regulators and it was believed to be another crypt of friendly Banks like SilverGate. FDI C to cover the bank after customers withdrew over 10 billion dollars of deposits.


  • But now you might think that how is Crypto by all of this?

Well, this is something that requires a bit clearer for sure because there is really no certain connection that you can say that It all happened just because these banks but dealing in cryptos or giving crypto-based services to the customers.

It is really a very vague claim by media outlets that crypto is all that's behind all of this and US government is also using it as a tool to take action against these banks but in reality, it all happened due to poor management by the ones in charge of running the infra.



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