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- Eminent crypto community members believe that other banks will fill the space created by the US-based bank firms.
- Signature Bank was closed by the New York regulators on Sunday.
Last week, social media networks, including crypto Twitter, reacted to losing two central banking pillars for the crypto industry, Silvergate Bank and Silicon Valley Bank (SVB). The New York-based Signature Bank joined the thread on Sunday as the financial regulators closed the Signature Bank, registering it as the third largest US banking collapse in history.
On March 8, the crypto-friendly bank Silvergate announced voluntary liquidation and closed the firm entrance gates. Following the Silvergate collapse, the Federal Reserve closed the California-based bank SVB on March 10. On Sunday, the New York regulators made a shocking announcement about the shutdown of another lender, Signature Bank.
Earlier, the banks, as mentioned above, played a vital role in financing crypto companies. Eminent crypto community members believe that the shutdown of three institutions will impact economic stability and pave a path for other banks to fill the void. Nic Carter, the partner at Castle Island Ventures, told CNBC that “crypto liquidity could be somewhat impaired.”
On Sunday, the US Federal Reserve reacted to US market conditions and announced emergency funding measures to ensure “banks can meet the needs of all their depositors.” Earlier Coinbase crypto exchange tweeted, “We’re sorry to see Silvergate make the tough decision to wind down their operations. They were a partner and contributors to the growth of the crypto economy.”
Jake Chervinsky, Chief Policy Officer at Blockchain Association, reacted to the disclosure of the banks. He tweeted that he believes many other banks can refill the space “without taking on the same risks as these three.” Jake replied to BORED on a Twitter thread, “Right, but it did bank a lot of crypto firms that will need new accounts, and without Silvergate or Signature, the gap in the market is wide.”
Scott Melker, a crypto investor, said the collapse of three bank firms left no choice to crypto companies for banking options. He tweeted that “Silvergate, Silicon Valley, and Signature all shuttered. Depositors will be made whole, but there’s nobody left to bank crypto companies in the US.”
Meanwhile, the author of the popular book Rich Dad Poor Dad, Robert Kiyosaki, advised buying real gold and silver coins to avoid losses. “Two major banks have crashed. #3 set to go. Buy real gold and silver coins now. No ETFs. When bank#3 goes, gold and silver rocket up.” Investors are finding gold can be a safe asset even if the Federal Reserve pauses the interest-rate hike.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
