Silicon Valley Bank, a lender to some of the greatest names in technology, crashed on Friday, becoming the worst bank failure since the 2008 financial crisis. The Federal Deposit Insurance Corporation now has control over approximately $175 billion in consumer deposits. The Federal Deposit Insurance Corporation was designated as the receiver by the regulator.
The value of Dogecoin (DOGE) has fallen in the cryptocurrency market after massive amounts of fear, uncertainty, and doubt rushed through the market after Silicon Valley Bank failed on Friday morning as a consequence of a bank run and a capital crisis. DOGE was trading at $0.065712 at the time of writing, showing a 15% drop in the previous seven days. The meme token has declined by 31% in the last 30 days and by 24%
in the last two weeks, with only a 2% increase since the beginning of 2023. The failure of crypto-friendly bank Silvergate has also caused market sell-offs, with the market capitalization of top meme tokens falling by roughly 11% in the last 24 hours. DOGE trade volume has increased by about 30%, signalling an approaching market sell-off.
The fall of SVB was linked in part to the Federal Reserve’s strong increase in interest rates the previous year. Banks have collected long-term Treasuries that appeared low-risk at a time when interest rates were near zero. But, as the Fed raised interest rates in order to control inflation, the value of these assets fell, resulting in unrealized losses for the banks.
The FDIC announced today that Silicon Valley Bank is the first FDIC-insured institution to collapse this year. SVB shares were suspended on Friday after falling as much as 66% in premarket trade. According to an AMBCrypto study, cryptocurrency-focused venture capital investors requested that their portfolio firms remove funding from SVB as they tried to convince their clients.
Nevertheless, some industry observers predict further hardship for the crypto industry in the aftermath of Silicon Valley Bank’s bankruptcy and the spread of FUD about hidden risks in the financial and banking sectors in general. Despite this, DOGE’s 24-hour trading volume has recovered to $681 million, a 103% increase, causing frantic market activity that may quickly result in profits when the conditions are favourable.