Silicon Valley Bank fell on Friday, following the collapse of Silvergate Bank on Wednesday and Signature Bank’s close call.
SVB made the same mistake as Silvergate: they focused on boom-and-bust customers and piled their deposits into long-term securities.
Circle had $3.3 billion in SVB — everything over $250,000 is uninsured.
USDC lost its peg over the weekend, falling below $1.
Like Silvergate and SVB, Circle grew fast in the pandemic years and piled deposits into bonds.
Large uninsured depositors tend to panic easy and yank their deposits.
Anything that grows fast, needs to be checked out in a way it hasn’t been checked out before, said Dan Davies, author of Lying for Money.
Read our full post — this one is on David’s blog. [David Gerard]