Weekly Radar (31 March, 2023)

The recent collapse of three major US banks with close ties to the crypto industry has left many wondering if this is a repeat of the 2008 financial crisis. Silicon Valley Bank, in particular, was a significant lender for tech startups and crypto companies. The collapse sparked a bank run, resulting in the withdrawal of $42 billion worth of deposits. Stablecoin issuer Circle also revealed it had $3.3 billion of reserves at SVB, causing USDC to lose its 1:1 peg to the US dollar. The collapse was due to poor risk management and unfavorable market conditions, with the bank investing in long-duration US Treasury bonds. <img alt="" src="https://miro.medium.com/v2/resize:fit:700/0*Tvz5PPqL1Y5wcb-s" style="height:467px; width:700px" /> The collapse of crypto-friendly banks leads crypto companies to find alternative solutions to connect with the traditional financial system. However, the failure may have a silver lining, with Bitcoin rallying while bank stocks were tumbling. This could indicate that people are realizing the flaws in the traditional banking system and taking self-custody of their money as a valid alternative. <a href="https://medium.com/polkamarkets/weekly-radar-31-march-2023-fc1b8d73cdc3">Read More</a>