Crypto Weekly report- latest news and Updates in the Crypto market
The Collapse of Silicon Valley bank
Silicon Valley Bank (SVB) collapsed on Friday, sending staggerinto the entire world, making it the second biggest banking failure since the 2008 financial crisis. The US government regulators took control of Silicon Valley bank’s assets to halt the bank run as agitated depositors rushed to the bank withdrawing billions of dollars in a matter of hours.
President Joe Biden assured depositors that they could access their money without fear. The US regulators also stated clearly that the investors won’t be protected as they need to bear the risk. The government stated that they will take stringent steps to strengthen the rules for the banks, and financial institutions and foresee this kind of bank failure won’t happen again in the future.
What is Silicon Valley bank?
Silicon Valley Bank (SVB) is a commercial bank based in Santa Clara, California, which is the 16th largest bank in the United States. SVB provides banking services to technology companies, startups, venture capital firms, and life sciences. With this tragic incident, more than $150 billion in deposits were locked up.
The reason for the collapse
The wrecked decisions by the bank’s executives in buying bonds lead to this disaster. It was during the pandemic, the technology sector was booming and investors were pouring into the tech industry as consumers became more reliant on digital products and services. Sooner, the SVB bank started receiving huge amounts of deposits from the tech companies during this phase. The bank then used to hold a small amount of cash as a deposit and the rest they invested into US government bonds as the interest rate was minimal at that point in time.
The federal bank hiked the interest rates because of inflation and as a result, bond value fell quickly, which was not anticipated by the SVB.
On the other side, the Tech industry witnessed a decline in company growth due to a surge in the borrowing rate and other factors. They withdraw their deposits from the bank to grow their business and cover their financial obligations. The unexpected changes in the global market put the bank at stake. As depositors erupted and were piling up to withdraw their money, the bank had no other option but to sell their bonds at lower prices to allocate funds which resulted in an immense loss.
On March 8, the bank was compelled to raise the capital by selling $2.25 billion in shares to plunge the loss created by selling the securities. This news created turmoil among the investors and customers equally, and within hours of the announcement, the bank was surrounded by an influx of customers rushing to withdraw their deposits, which caused the bank run.
The government regulators intervened by taking the situation under control and shut the bank with immediate effect, subsequently placing it in receivership under the Federal Deposit Insurance Corporation(FDIC). The FDIC has informed that all the deposits of SVB are transferred to a newly established bridge bank and the depositors will have access to their funds on Monday.
As per financial experts, another cause for this crisis was the law that was signed by Donald Trump to roll back critical parts of Dodd-Frank. Trump signed a bill that limited regulatory requirements for regional banks with less than $250 billion in assets and SVB had over $200 billion in assets by the end of last year, according to CNN. If the regulations were implemented, SVB could have been in a safer position than now.
Shareholders sued the parent company, SVB Financial Group, and its executives, Greg Becker and Daniel Beck for the collapse. The shareholders filed a lawsuit on Monday in the federal court, in California. The bank staff received their yearly bonuses on Friday, only hours before regulators seized the bank, according to people familiar with the matter. SVB had an estimated $209 bn worth of assets and $175.4bn worth of deposits before it sank.
Will this Impact other banks?
According to recent events, the banking sector and other financial institutions are being affected in a cascading manner. The heat is evident on the banks. The value of shares of banking companies fell dramatically on the stock market. Investors are concerned and probably vulnerable to market conditions.
Asia’s banking equities are declining, and global financial companies have already lost $465 billion in market value. The banks that were being considered for a downgrade included First Republic Bank, Zions Bancorporation, Western Alliance Bancorp, Comerica Inc, UMB Financial Corp, and Intrust Financial Corporation.
Banking stocks in Asia have shown a decline and global financial stocks have lost $465 billion in market value so far. First Republic Bank, Zions Bancorporation, Western Alliance Bancorp, Comerica Inc, UMB Financial Corp, and Intrust Financial Corporation were the banks that were under review for a downgrade.
President Joe Biden stated that the US banking system is safe and vowed to implement stringent banking regulations. Biden also reassured the depositors that their money is safe as a part of US emergency measures.
Signature bank, a commercial bank, was also closed by the state regulators on Sunday and the FDIC took control of the bank with immediate effect. Signature bank deposits mostly came from the crypto industry. The crypto exchange, Coinbase, had $240 million in cash at Signature Bank. The main depositors in the Signature bank are small businesses.
The impact of SVB collapse on the Crypto market
Following the announcement of the SVB shutdown, the cryptocurrency market saw some minor turbulence, which led to investor fear. The announcement had a significant impact on the market for stablecoins. The USDC has lost its dollar peg after the news spread out as Circle has a deposit of $3.3 billion in the SVB bank and is the issuer of the stablecoin USDC.
This injected fear and uncertainty in the investors and they soon started trading their USDC for Fiat currency, which resulted in a downfall of the USDC value from $1 to $0.88 on March 11. Along with USDC, other stablecoins also started de-pegging.
However, the stablecoins recovered and regained their peg as investors’ confidence returned soon after the US regulators reassured them that the depositors will be able to access their money from SVB. Bitcoin too had a dip after the news broke out but soon bounced again after the positive news from the regulators.
The banking industry is facing underlying financial problems which engendered tension among depositors and shareholders. This is an alarm for the banking industry to be alert and develop robust strategies and contemplate the future.
SHIBARIUM– A new wave in the crypto space
Shibarium is a Layer-2 blockchain network that is linked to the Shiba Inu coin which was built on the Ethereum blockchain(Layer-1) that allows anyone to build DAPPS, integrate into IRL businesses, and create projects.
Shibarium is of low cost and burns Shib to make transactions where we can track the burnt Shib on the burn portal. Shytoshi Kusama, the lead developer of Shiba Inu, announced the launch of a beta test called “PUPPYNET” which went live this week. m
Shibarium has created two Twitter accounts: @shibariumnet and @shibariumtech to communicate and inform the latest updates and developments on the Shibarium network.
Shibarium is providing an excellent opportunity for users to become a part of it. Anyone can join the Shibarium community by becoming a validator, writing for them, or collaborating with them. The users can earn rewards with Shibarium Staking. The Shibarium developers are planning to introduce Shibarium NFTs soon.
Disclaimer: Before having your hand on the tokens and projects on the network, do your research before spending your SHIBS on those tokens.
To join, you need to fill out an intake form on their official website Shibarium Intake Form (shibariumtech.com).
Shinarium provides different projects which include:
- Shib.io The metaverse
- ShibaSwap
- SHIBA Eternity
- SHIBA ZONE Venezuela
- SHIBA Wings
- Shiba Liquor Wine Spirits & Craft Beer
- WELLY Friends
Shibarium is building a robust, secure, fast, and low-cost platform to provide a better experience to the Shibarians.
Crypto news in India
Indian government seized funds over ₹953 crores in Crypto Crimes
The finance minister of India, Nirmala Sitharaman said that the Enforcement Directorate (ED) is investigating various cases related to money laundering and terrorist financing under the Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA). Till now, they have seized almost ₹953 crores from crypto-related crimes.
As crypto crimes are significantly on a rise, the Reserve bank of India (RBI) has issued public notices to alert people and be cautious while trading in the cryptocurrency industry.
Recently, the Indian government has announced that the crypto sector also comes under the provision of anti-money laundering. Many experts have welcomed the move of the government and expect the regulations will help to curb the crimes in the crypto sector.
The Indian government has scrutinized the activities happening in the crypto space and is collaborating with G20 nations to tackle the potential risk involved in the crypto sector by implementing regulations and monitoring the activities.
New Cryptocurrencies in the market
According to Coinmarketcap, a popular price-tracking website, there are almost 22,911 cryptocurrencies available as of now and the number keeps piling.The global crypto market cap is $1.10T and the volume of all stablecoins is $95.60B, which is 93.13% of the total crypto market.
The news of rising inflation had a positive impact on the crypto market. Bitcoin and Ether experienced a surge in price as the US government released the Consumer Price Index (CPI) data for Feb 2023. Bitcoin reached a high of 26,000 on March 14 after the inflation data got released.
List of 5 current ICOs
Initial Coin Offering (ICO) is a process of raising funds by companies to launch a token, coin, or service related to cryptocurrency. As ICOs are not completely regulated, investors should do their research thoroughly and should be vigilant before investing in them.
Check for the whitepaper where you can find every detail of their project including their developers, their purpose, their goals, etc. Ignore if the ICO doesn’t have a whitepaper or the whitepaper is poorly written, that’s a hint of a danger bell. There are many instances where most of the ICOs turned out to be fraudulent. Only a few yielded profits and many failed to prove their mark.
Want to know how to launch an ICO, click here
Here are a few ongoing ICOs listed:
- Love Hate Inu (LHINU): Love Hate Inu is a meme token that provides real utility in a voting system built on the Ethereum blockchain platform. This features a secure and transparent platform for voting on issues that matter. The smart contracts in the platform prevent spam and manipulation in the voting process. Users can earn tokens for voting. The public sales are between Mar 11, 2023 – Mar 18, 2023
Token info
Ticker: LHINU
Type: Utility-token
Token standard: ERC-20
Token price in USD: 1 LHINU = 0.000085 USD
Accepted currencies: USDT
Token distribution:
90% – PreSale
10% – Listing
- Fight Out (FGHT): FightOut is a Move-to-Earn (M2E) fitness app and gym chain built on the Ethereum platform. Users are rewarded for completing tasks like workouts and challenges, earning badges, and developing the community. The pre-sale is between Dec 14, 2022 – Mar 31, 2023.
Token info
Ticker: FGHT
Type: Utility-token
Token standard: ERC-20
Token price in USD: 1 FGHT = 0,01665 USD
Accepted currencies: USDT, ETH
Token distribution:
60% – Presale
10% – Liquidity
30% – Reward and Growth
Funds allocation:
70% – Venue Acquisition & Refurbishment
18% – Marketing & Partnerships
12% – Development
- C+Charge (CCHG): C+Charge is a blockchain-based network that allows EV drivers to earn carbon credits by driving and charging their vehicles. C+Charge users are provided with individual electronic wallets, which can be accessed through the C+Charge app. C+Charge’s payment system is supported by the C+Charge utility token which is used to pay for each charge.
Token info
Ticker: CCHG
Type: Utility-token
Token standard: BEP-20
Token price in USD: 1 CCHG = 0.013 USD
Accepted currencies: BNB, USDT
Token distribution:
Angel Sale – 5.0%
Private Sale – 20.0%
Public Sale (IDO) – 5.0%
Community (Staking, Airdrop, and Giveaways) – 12.5%
Founders & Team – 15.0%
Ecosystem Fund – 15.0%
Partners – 10.0%
Listings & Exchange Funds – 7.5%
Environmental & Charity – 5.0%
Advisor – 5.0%
- RobotEra (TARO): Robotera provides a shared multiverse built on the Ethereum blockchain, that connects with other worlds and NFT communities where you can create a park, Land, Robots, and participate in quests. You can also display your original work in museums and you can build a new multiverse.
Token info
Ticker: TARO
Type: Utility-token
Token standard: ERC-20
Token price in USD: 1 TARO = 0.02 USD
Accepted currencies: ETH, USDT
Token distribution:
Institutional Investor – 2.00%
PreSale – 1 – 5.00%
PreSale – 2 – 5.00%
PreSale – 3 – 5.00%
Team Allocation – 10.00%
Advisory – 3.00%
Play-to-Earn Reward – 25.00%
Treasury / DAO – 33.00%
DEX liquidity – 3.00%
ECO Fund – 9.00%
- Securedverse (SVC): Securedverse is an Ethereum blockchain-based gaming platform that offers a variety of games and activities along with trading goods and services for players using the SVC token. They have focused on the gaming industry to provide a secure and transparent experience to trades and gamers alike.
Token info
Ticker: SVC
Type: Utility-token
Token standard: ERC-20
Token price in USD: 1 SVC = 0.0143 USD
Accepted currencies: ETH, USDT
Token distribution:
IGO – 39%
Mining play to Earn – 20%
Staking, MM & Incentives – 14%
Team – 10%
Game Development – 10%
Partners, Advisors & Consultants – 7%
Do thorough research before taking any investment decisions, especially in this volatile crypto market.
