Bitcoin’s White Paper Revived After Silicon Valley Bank Collapse13. March 2023
• On March 10, the Silicon Valley Bank (SVB) collapsed, sparking fear among the crypto community.
• Six weeks after Lehman Brothers’ collapse in 2008, Satoshi Nakamoto released the Bitcoin white paper.
• The increased interest rates and SVB failure have impacted many crypto and tech companies, with Circle unable to withdraw $3.3 billion of its reserves from SVB.
Silicon Valley Bank Collapse Sparks Fear
The Silicon Valley Bank (SVB) collapse on March 10 has sparked fear, uncertainty and doubt (FUD) across the crypto community. Ryan Selkis, founder and CEO of Messari stated that “there’s an entire generation of builders who only read about Lehman and the financial crisis and scoffed at Bitcoin. Now, their eyes are wide open.” The collapse has led many to return to crypto roots — reviving the Bitcoin white paper published just weeks after the Lehman Brothers meltdown in 2008.
Rising Interest Rates
Some people blame the SVB failure on the rising interest rates in the United States. The Federal Reserve increased its benchmark rate over the past year to more than 4.5% — the highest rate since 2007. In January, inflation rate in U.S was 6.4%. As a result of this increase, Sheila Warren tweeted “add ‘interest rate driven bank run’ to increasingly long list of ‘things I did not think I’d see in 2023”.
Impact on Crypto Companies
Many crypto and tech companies have been affected by this bank collapse including Circle which could not withdraw $3.3 billion out of their total $40 billion reserves from SVB leading to a sell-off and USDC’s price dropping below its $1 peg. Meltem Demirors tweeted “the SPEED at which all this is happening is unbelievable”.
Bitcoin White Paper
Six weeks after Lehman Brothers’ dramatic collapse Satoshi Nakamoto released his historic white paper paving way for emergence of Bitcoin network .This event happened after some people had already begun doubting bitcoin as a viable cryptocurrency system due to lack of trust they had developed against traditional financial systems like banks etc..
The recent SVB collapse along with increasing interest rates has created much uncertainty amongst investors but it also highlights why Bitcoin was created in first place -to provide a decentralized alternative to traditional banking systems that are prone to collapses or manipulation by governments or central authorities .