Silicon Valley recalls the Lehman Brothers failure.
USD Coin price stabilized at a $0.9997 peg.
Silicon Valley Bank (SVB), which had connections to big-shot international technology firms and venture capital, failed on 10th March due to one of the oldest issues in banking. Also, the startling collapse of Silicon Valley Bank and Signature Bank, which were affected by SVB, continued the wave in the U.S. economy. And the government rushes to stabilize the banking system.
Silicon Valley broke down, alarmed the entire globe, and sparked the most unsettling of concerns. Also, bringing up the height of the financial crisis more than a decade ago, its demise is the biggest financial institution disaster since 2008 and the second-largest crash in the financial sector.
However, the 16th largest bank in the U.S. brought up the “flashback of the Lehman Brothers bankruptcy,” which was the event that set off a historical financial crisis in 2008. Moreover, Lehman Brothers, a company founded in 1847, collapsed at that time and never recovered.
Silicon Valley Effects on the Financial Industry
SVB’s catastrophe comes after it lost almost $80 billion of its market value and was shut down on Friday by New York regulators. It has resulted in many companies struggling and worrying about the side effects of the crisis.
USDC’s price depegged from its normal $1 to as low as $0.87 on Saturday, as Circle, the company behind USDC holds $3.3 billion in USDC reserves at Silicon Valley Bank. However, Today USD Coin price stabilized at $0.9997.
Also, the Signature which as shut down due to the $88.59 billion in deposits as of December 31, 2022, at Silicon Valley Bank. Further, the prominent crypto exchange Coinbase has exposure and holds $250 million in funds at Signature Bank.