Crypto Markets in Turmoil After Silicon Valley Bank Fails


The Crypto market has been in an uproar Saturday after Silicon Valley Bank (SVB) went offline. The US Treasury Department called a meeting of top financial regulators to discuss the situation. Soon after, the crypto market started to suffer, suggesting that the bear market of more than a year has entered a darker period.

Cryptocurrencies are a digital currency, yet they lack a central banking institution, like the Federal Reserve, so the question becomes: can the industry be saved? How will this all end?

Circle Internet Financial’s USDC stablecoin has massively depegged from its intended $1 price. This is a major setback for a product designed as a safe place to store money. The USDC/USDT (which tracks Circle’s Coin versus the larger one issued by Tether) dropped to as low as $0.89 on the Kraken Exchange at 03:49 UTC Saturday – a much lower level than it ever got during the market stresses that followed the FTX debacle in November.

The financial services company confirmed late Friday that SVB held around $3.3 billion of the reserve funds backing the second-largest stablecoin in the world. Stablecoins derive their value from these reserves. If one is worth more than $43 billion, there should be roughly the same amount of cash or cash-like fixed-income instruments stashed somewhere to back it up. USDC’s market capitalization is now below $40 billion.

The fees required to complete an on-chain transaction, known as gas fees, has risen. The median gas fee for Ethereum rose to 231 gwei (compared to the 20-40 range previously) on Friday, according to

Cryptocurrency was born in the aftermath of the 2008 crisis when governments pumped money into the financial system. Bitcoin was created with the idea of a currency without a central authority. If customers of SVB, including Circle’s USDC, are forced to take their money out, the consequences are unknown.

So the million-dollar question arises: who, if anyone, will step in to help? When Razer CEO Min-Liang Tan tweeted late Friday that Twitter should buy SVB to become a billionaire digital bank, Elon Musk replied “I’m open to the idea.”

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