According to In news that began circulating on March 11 in the wake of the Silicon Valley Bank (SVB) collapse, leading venture capital firms in the blockchain sector have assets worth more than $6 billion held in the defunct financial institution. These include $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.
A16z currently maintains active investments in projects such as Alchemy, Sky Mavis, and Yuga Labs, and was previously an investor in the Coinbase cryptocurrency exchange. Paradigm has invested in projects like Compound, Cosmos, and Uniswap. For its part, Pantera Capital participates in projects such as 1inch, Ankr and Zcash.
The news, written by Castle Hall and extracted from the records of the United States Securities and Exchange Commission, is a timely disclosure of the assets of venture capital companies guarded by SVB. It does not include updates such as recent withdrawals, deposits or transfers after the time of disclosure. Furthermore, although such companies are prominent investors in the crypto space, not all of their assets held in custody by SVB are used for investments in crypto projects.
SVB, a major financial lender serving venture capital firms and technology companies, was shut down by California regulators on March 10. At the time, it was the 16th largest bank in the United States, with more than $212 billion in assets. The cause of the bankruptcy was reportedly a failed leveraged bet on US Treasuries that led to $1.8bn losses on its $21bn investment portfolio after the US Federal Reserve. repeatedly raised interest rates last year, sending bond prices down sharply.
Despite the relatively small loss, a crisis of confidence ensued, leading to tens of billions of dollars of redemption demands in a couple of days. The company reportedly has $74 billion left of longer-term US Treasuries, which it has yet to liquidate to meet redemptions. Circle, the issuer of the popular USD Coin () stablecoin, currently has $3.3 billion worth of deposits stuck in SVB.
Despite the relatively small loss, a crisis of confidence ensued, sparking tens of billions of dollars of trade demands in a couple of days. The company appears to have $74 billion left in longer-dated US Treasuries, which it has yet to liquidate to meet more swaps. Circle, the issuer of the popular stablecoin USD Coin (USDC), currently has $3.3 billion worth of deposits being held at SVB.
SVB Crash Explained
Silicon Valley Bank—#16 largest US bank with $212B—just crashed 60% in 1 day & fell 22% post-close. Stock halted now.@BillAckman is calling a US gov bailout.@peterthiel is calling a bank run.
JPM, BAC, WFC all dropped 6%.
What’s next?Is this… https://t.co/xT4t5hLiwI pic.twitter.com/GEbvAdT8SQ
— Ming Zhao (@FabiusMercurius) March 10, 2023
Explanation of the fall of the SVB
Silicon Valley Bank, the 16th largest bank in the US with $212 billion, plunged 60% in one day and fell 22% after closing. Bill Ackman is calling for a bailout from the US government. Peter Thiel is calling for a bank run
JPM, BAC, WFC fell 6%.
What will happen now?
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