Creative design thanks to Canva
Just when everyone expected to see a bloodbath in crypto because of the Silicon Valley Bank incident, where it was the prime reason why USDC was de-peg to at worst $0.88 from its promised stablecoin, Bitcoin went up from below $19k to $22.5k today as people all over the world realized a very important thing - Crypto isn't the problem.
Well, everyone including me was expecting we'll see the worst in crypto. Silvergate last week has announced its shutdown, where Silvergate Exchange Network (SEN) was primarily one of the biggest bridges of finance to crypto. Then, the news followed the bankruptcy of Silicon Valley Bank, the 16th largest bank in the United States and the 2nd largest bank in history to have announced its shutdown of operations.
It didn't only affect crypto but the finance sector as a lot of companies were stuck from their assets because it was deposited to SVB. In fact, a lot of employees are expecting to have a delay on their payrolls. The problem with the shutdown is that only around 3 percent are recoverable under insurance covers as Federal Deposit Insurance Corporation only covers $250,000 per account. 97% of the deposits will suffer.
What does this Mean?
Photo source: LeMonde
For me, it could only mean one thing - that crypto isn't the issue here.
The issue lies in the mismanagement of the people handling certain projects. Banks are clear examples of mismanagement, our finances are just used to fuel their business. What do they provide? A little to no annual yield. The technology we access? They have to build that because there's nothing they can offer.
Banks are heavily exposed after the SVB collapse. SVB in fact was an example of risking people's money for their own benefit. Unfortunately, it didn't pay well. Guess what happened? We are paying the price. Well not me, as I don't have an account in SVB. But I'm affected because it shambles the crypto market for a bit, and it is affecting my portfolio.
This incident is a big win for crypto. These kinds of news make people realize that Crypto isn't the problem. In fact, it offers a promising technology in the future. The way things are going, we've been very mature and meticulous with the people handling promising projects. It will not work if the motive is different than the roadmap. 2018 ICOs are a great example of that, lots of money is being squandered there. Exchange tokens are another bubble that happened in 2022 and we will use these tragedies until we get furnished.
