Bankless - SVB Banking Crisis, Fed Pivot, BTC ETH price action📈

Starting point is 00:00:04 Bankless Nation, we have a banking crisis that just happened over the weekend. David, the second largest bank in U.S. history collapsed Silicon Valley Bank, SVB, some people are calling it. We've been monitoring this all weekend. We wanted to give you guys an update. We do these special episodes every once in a while. Usually when the world's on fire, something crazy is going on. Yeah, we're just drinking from the fire hose and finding out more information as things go.

Starting point is 00:00:33 So we may even have some updates in this live stream. But David, what are we going to cover today? Yeah. So all of this news broke almost exactly when we stopped recording the weekly roll-up on Thursday. And it seems to be that this episode, I mean, news is still breaking, but unless something big and new happens, it seems to be that all of this event, all the events have happened between Thursday evening and Sunday evening. and then the markets open this Monday morning and the fallout of all of those events have now taken place.

Starting point is 00:01:08 It could be that this whole entire story started and ended inside of the last three days. And so we weren't able to cover it on the bankless Friday weekly roll-up, which is why we are doing this weekend roll-up on Monday right now to cover what the hell just happened in the world of finance and banking and the Fed and Treasury and FDIC, Silicon Valley Bank, signature bank, Silvergate Bank, the run on all of the banks, all of the mid to load to hear banks and the flight towards the big banks. And is this overall an attack on crypto, I think, is where this conversation will eventually end. Ryan, were you, I was doom scrolling this weekend. How were you doing? Yeah, I was like, look, I was doom scrolling this weekend. My big question was, was USDC going to be okay? Right. Right. That was definitely a big question in my mind.

Starting point is 00:01:58 And also another big question around a signature bank, because that was that was kind of the next. That's where USDC has a whole bunch of its stores as well. And then a big question around Silicon Valley Bank, like what was going to happen to depositor funds? Right? Because this is a story that is definitely the banking sector and affects in a big way Silicon Valley tech companies. So a whole bunch of the crypto startups that we know were panicking over the weekend. Like are we going to be able to make payroll on Monday? And then there was this question of contagion.

Starting point is 00:02:30 Is this going to spread beyond Silicon Valley Bank to the rest of the U.S. banking system? Is crypto going to get, you know, wrapped up in this? And of course, because by 7, the markets are trading in cryptic. And the stock market's closed. FDIC can come in and be like, oh, we're just stopping this bank. And we're going to sort it out over the weekend. And we'll give you an update Monday. Well, crypto still trades.

Starting point is 00:02:53 And so you saw USDC trading like 10 cents off the peg, U.S.C. got down to $0.88. Isn't it really? 88 cents. Okay. So you're like, oh, meltdown. You're looking at die and you're like, what's going on? Is there something I don't know?

Starting point is 00:03:07 My gut around this was that the Fed was going, the FDIC, rather, was going to come and reserve depositor funds. Like bailout is the wrong term, but like guarantee, I should say, guarantee deposit deposits, protect customers. Yeah, because if they don't, the entire banking sector, could risk contagion. And does anyone really want that? And the answer is no.

Starting point is 00:03:33 So I sort of expected it would end the way that it hasn't. Maybe we're kind of rushing the conclusion of the story before we get to the very beginning. But it ended in a much better place than the weekend started. And yet, David, I don't know that it's over. All right. We might just be in chapter one of a multi-phase book here of. So a question in my mind that I would love to get answered is like, okay, what happened? And then what does it mean going forward?

Starting point is 00:04:02 But also, how did we get here? A bank run? Like the second largest bank run in U.S. history? Like, how does that happen? So hopefully, I know you've done a lot of research on this. You put this entire agenda together. I'm kind of along for the ride. I'm going to be asking you questions, man, to try to get up to speed on this.

Starting point is 00:04:20 Yeah, I think you touched on the right questions. And really just to reiterate them, the story opened up with, is U.S.D.C. going to be okay. Some people thought that the base case for USC as a result of this news was it goes to zero. That was the most extreme case. And we all, as a crypto industry, sped run learning about banking and finance. So the weekend opened up with, is USC going to be okay? How much funds are lost because of the insolvency of Silvergate Bank? Why did this happen at all?

Starting point is 00:04:51 What were the forces that created the run on the bank? So that is a question that we will ask and also attempt to answer in this show. the FDIC ensures, of course, a quarter million deposits, but now it's ensuring everything. What does that mean for the banking sector and how does that change the banking industry? And again, like I said, is this an attack on crypto? So a lot of these questions and more as well, I think we're going to tackle here in this episode. We have, Ryan, and for all the listeners that were not glued to the screens this weekend, I found this, I found this a very short, awesome TikTok, which I think we will go ahead and play

Starting point is 00:05:27 right now just to catch everyone up because it's a funny and actually really useful way to tell the story of what just happens so ryan you're ready to watch this tic-tok video let's do it let's do it yep that's me you're probably wondering how i got here the year is 2019 and i live like a king hey SVB looking good randall investors love me conditions are perfect hey i just got 50 million dollars in funding could i deposit in your bank and companies are getting more funding than ever. What's your startup do? It's an app where you rate how hot people's daughters are without them asking. I went to Berkeley. Put it in. Oh, we're making some cash. Hey, let's put $80 million in mortgage back securities. Oh, that sounds a little 2008, don't you think?

Starting point is 00:06:13 I mean, interest rates are down. We'll get a return of 1.5%. I like our odds. Thank you. Yep, life was pretty great as the 20th largest bank in the U.S. and nothing was going to ruin that. Surprise! It's 2022. And you will not believe the price of eggs out there. Okay, people did not like daughter rank. Let's some money, please. Hey, let's sell some security. Hey, what are you doing? Sir, almost none of our deposits are insured.

Starting point is 00:06:42 If I tell you, you can't freak out. Okay. We are having a tiny liquidity crisis. A what? So we're just gonna do a little bit of capital raise. A liquidity crisis? No, no, it's not bad. My stock is down today.

Starting point is 00:07:01 Why could that be? Stop! That money was for payroll, motherf- Okay, I won't raise any capital. I won't raise any capital. Because we're exploring a system. sale. I should be fine. Oh, come on. All right, and that's that. I thought that was pretty good. So we're going to walk through each individual parts of those, everything that was just mentioned there,

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Starting point is 00:10:55 Why are the words banking crises being thrown around out there? And I think I found the best really, the simplest explanation of this, which was put together by our good friend, Jim Bianco. And so here's a very long tweet because he's doing the whole long tweet thing, but I pulled out the basically the gist out of this. And the things that I really want to emphasize here are twofold. One, this is different than 2008 in mainly two different ways.

Starting point is 00:11:20 One is because of just the banking sector is different. And what is happening today is the Silicon Valley Bank crisis is different than 2008. We'll talk about that. But first I want to start with, it's different because we have modern day technology. So the punchline here is that bank runs on the bank can happen 100 times faster than they could have happened in 2000. and that is because of an ad of just a growth in the virality of social media communications. Somebody can cause a run on the bank on Twitter these days because the information can spread that a bank might be insolvent super incredibly fast. Not only that, but also wire transfers,

Starting point is 00:12:00 ACH transfers, just like time to settlement is overall much faster. And so we are, what is it, 15 years later after 2008, things go much faster these days. news spreads much faster, news spreads like wildfire, and the ability for mobile banking to allow for people to submit request to withdraw is almost instantaneous. You can line up in a virtual queue to withdraw all of your money out of a bank on your mobile device like that. And so that's one part of this story. And this is what Jim Bianco is saying is like, welcome to the world of mobile banking. Gone are the frictions of standing in line with tellers instructed to count money slowly. How did $42 billion get withdrawn Friday alone without thousands in line? Your phone.

Starting point is 00:12:47 And so Jim's message to the bankers and regulators worldwide is that this should be scary. The entire $17 trillion deposit base is a hair trigger away expecting instant liquidity. And he's saying banks will never be the same. So this is like the external force. We have external powers, external technologies allowing for bank runs to happen faster. But first, like, there has to be an actually underlying fundamental structure as to why there would be a run of the bank in the first place. And this goes back to the rising interest rates, the fastest rising interest rates that we have ever had in our lifetimes probably ever. And so Silicon Valley Bank and many, many other banks were still paying half a percent on accounts when Treasury bills were yielding these banks five percent. So banks are like taking in tons of profits.

Starting point is 00:13:33 And so Jim Bianco says, initially as rates passed two, three, four percent, the public did not notice. It's like, oh, I don't really care about the yield in my savings account. It's been at zero for forever. Never really like making the connection that as interest rates rise, they should actually be getting those yields. And so the bankers, Jim Bianco claims, thought that deposits were well anchored at their bank and not moving regardless of the interest rates paid. But at 5% when yields finally, the public could get 5% yields on, on, on. treasury bills, people started to realize that they needed to move their money out of savings accounts and deposits that weren't getting them those yields and move them into funds that they

Starting point is 00:14:12 could. And so banks started to get squeezed, convert their loans and securities to cash instantly so depositors could leave for better rates. And the bleed out from tech firms started to make struggling happen. And this is where in addition, we have, so we have those two impacts. We have the discrepancy of yield and people wanting to get more yield because treasury rates are going up. Then you have people like Senator Warren, who starts tweeting out with glee, Jim Bianco says, about Silvergate going out of business and depositors at SVB. He says, gets the message, pick up their phones, and starts lining up to withdraw the money out of Silicon Valley Bank.

Starting point is 00:14:50 And so Jim Bianco finishes this and saying, the FDIC needs to raise the deposit insurance ceiling to unlimited as they did in 2008, besides $250,000 a made-up number anyways. So he says make up a bigger number. So this is Jim Bianco's autopsy of what happened, Ryan. And so I'll pause there and kind of get your reaction from that. Yeah, I think, I think so we're getting right into the why this happened, right? But can we go over the facts of like what actually happened last week? Because to me, and probably for a lot of people who weren't like glued to their screens,

Starting point is 00:15:21 this was sort of a whirlwind. So we had Silvergate Bank, which is a crypto-focused bank last week, that essentially did they announce unwind insolvency? And that was kind of the first, I guess, domino to fall here. And I believe that this was a fairly orderly process in that equity shareholders were going to get wiped in Silvergate, but depositors would be made whole. And this was kind of announced set in motion, I believe, was that early last week now, David? And this is, so this is number one, bank number one, Silvergate Bank. Now what you're talking about here is Silicon Valley Bank.

Starting point is 00:16:06 And they had, I guess we would describe as sort of a run on the bank where a whole bunch of depositors wanted to withdraw at the same time and couldn't and froze. I'm just like, I want to get the facts of what happened right first is, yeah, what happened late last week? People did a run on the bank. And so all people started to understand that Silicon Valley bank did not have sufficient liquidity. And so it turned into a prisoner's dilemma. And so as soon as some people started to realize, they started to withdraw, which starts to compound the problem, right?

Starting point is 00:16:42 A classic run on the bank. But why was it just Silicon Valley? Why not the entire banking sector? It wasn't like there was this whole global scare where all American citizens were like, I got to withdraw. Why was it specific to Silicon Valley? Well, I think because a lot of these banks are doing this, the classic thing where they do, where they invest customer deposits into long-dated securities, long-dated treasuries, not completely, but some of it.

Starting point is 00:17:08 And Silicon Valley Bank was the most egregious in having a mismatch between their short-term liquidity commitments to some deposits and how much they were investing into long-term illiquid treasury bills. And what? Depositors in the market just woke up and realized this. They were like, oh, my God. Rates are going up. There was Silvergate that had a banking crisis earlier this week. We better check on Silicon Valley Bank because we know they purchased a whole bunch of government bonds, essentially, that are now kind of underwater and have decreased in price.

Starting point is 00:17:41 And so they might not have enough assets to cover liabilities. And if they don't have enough assets to cover liabilities, then depositors' funds are at stake, withdraw your funds. like this kind of communication is going on. It's phone calls, Zoom calls, telegram chats, social media chatter amplifies it, and that precipitates a run on Silicon Valley Bank as well. And all of this happened, what, like Thursday and Friday toward the end of last week? Yeah, that's correct. And I don't really think there's any one like silver bullet that caused this whole thing.

Starting point is 00:18:13 I think really the messaging that I'm getting is that as interest rates increased, it would put more stress on the banking sector. And that's fine, but they did it too fast. Interest rates went way too fast. And eventually that this catches up, right? You remember when we had Jim Bianco on last time, he was like, yeah, they're going to continue to raise race until something breaks. Well, the combination, what Jim Bianco is saying is the combination of a mismanaged

Starting point is 00:18:40 treasury, which Silicon Bank has alleged to have been like very egregiously mismanaging their balance sheet, right? Not enough liquidity to two long investments into two long. long-term, long-time horizon treasuries and mortgage-backed securities. And so as interest rates increase, more and more banks become under pressure and the first banks begin to fall. And it just so appears that Silvergate, Silicon Valley Bank, and perhaps also signature bank are the ones that are furthest out on the risk spectrum. And so they have taken the first wave of hits when it comes to stress in the banking sector. Does that make sense? Yeah, I think it does. So I'm trying to understand,

Starting point is 00:19:21 And like when we get into the, so that's what happened. There was a run on the bank. And then what did they just freeze? They stopped deposits from being able to withdraw their funds. So there's an actual freeze on the bank. So if you got in early enough, you could actually withdraw your funds from Silicon Valley Bank and put it in another larger bank. Because I guess that's where everyone is fleeing.

Starting point is 00:19:41 You go from the weaker bank to the stronger bank. But at some point in time, there's an actual freeze where Silicon Valley Bank said no more withdrawals. We have to freeze. The FDIC has come in. The feds are here, and they are now trying to sort things out. And by the way, depositors, if you had millions of dollars in Silicon Valley Bank, you have to wait until Monday for more news. This is sort of what happened on Friday, right?

Starting point is 00:20:05 Yeah. And apparently the FDIC was eyeing SVB prior to this. So they had live data and were monitoring the bank prior to the actual shuttering of the bank. And so they were ready. They were ready for action. Yeah. Okay. And then whose fault is this?

Starting point is 00:20:24 So, okay, so we mentioned a few people, right? So we've got a few different stakeholders here. We've got Powell and the Fed. They are raising rates very aggressively and very quickly. We've got Silicon Valley Bank who has a balance sheet. And they are purchasing, they could purchase- They could purchase all sorts of things, but they have specifically chosen to purchase long-dated securities.

Starting point is 00:20:47 and some mortgage-backed securities. And then you have depositors, which are a whole bunch of Silicon Valley tech companies, but also some mom-and-pop businesses and some average everyday Americans. But disproportionately, it was kind of like Silicon Valley VCs and startups and that sort of. Those were the depositors here.

Starting point is 00:21:09 So of those three parties, we've got like the Fed, we've got Silicon Valley executives and management, and we've got depositors. whose fault is it that Silicon Valley Bank is in this situation? I think a lot of people are pointing fingers right now. I think it is a collection of all of those things, mismanagement by the management of the bank, a lot of risky startup ventures making risky startup venture bets inside of a 0% interest rate environment. And then you have Elizabeth Warren, who's going after the banking sector, causing

Starting point is 00:21:46 fears to have to be had about Silvergate, which, you know, starts to permeate into, like, what are the banks that are very proximate to Silvergate in terms of their client base? Well, that's Silicon Valley Bank and also Signature Bank. And so it's all of these things, right? And then it's the virality of social media and the fact that depositors weren't getting sufficient yield on their deposits. And so they withdrew from Silver, from Silicon Valley Bank to go elsewhere. It's all of these things.

Starting point is 00:22:13 And so, but I think that's why the claim that, this was kind of inevitable. Bologi, I know, is really pointing the fingers at the powers that be, if you will. So he tweets out, the Fed said till December of 2021 that inflation was transitory. They let banks buy bonds with customer deposits. Then suddenly height rates to decadal heights. The bonds they just sold got less valuable overnight. Anyone who trusted the Fed got wrecked. And now so to their customers. So some people are definitely just pointing fingers and saying, it's the Fed's fault. The fastest rate hike in history changed the paradigm of investing way too quickly for banks to be able to respond. And so rather than it being a slow transition from one

Starting point is 00:22:58 paradigm to another, it was too fast. Who's fault do you think it is? I agree there's some shared blame here. And there was that fourth category that you mentioned of like politicians just causing bank runs because they're chasing clout, which is just crazy that that can happen these days, but that seems to be the case. But I guess if I'm assessing those four different groups of who's at fault, I feel like the Fed has got to bear the weight of this responsibility, like maybe 40 to 60 percent, right? Decreasing rates to zero, increasing them so fast, money printer, easy money era, all of these things, even allowing like tech companies, low cost of capital and sort of bubble style of venture capital pricing and funding, right?

Starting point is 00:23:50 So they've got a disproportion of view. You could also, of course, blame any clout chasing politicians that were pushing a bank run. You also have to blame Silicon Valley Bank, don't you? Their management. They didn't have to purchase long-dated securities in this way. I mean, they knew they should have known the risks going in, given the climate and given what, of course, the Fed. is going to need to raise rates.

Starting point is 00:24:14 If they were managing risk, and other banks aren't in the situation, if they were managing risks appropriately, they would have had a different portfolio of assets kind of backing their entire bank. So you have to wait a lot of the blame there. Maybe that's another 40%. Maybe it's 50 or 60. I could be persuaded. But depositors, did they like, what's your?

Starting point is 00:24:34 Because I know there's been a lot of debate about depositors, right? It's like, some people are like, hey, these Silicon Valley tech bros, you know, They're just rich fat cats and hang them out to dry. Don't. A lot of people, at least on the political side of Twitter, we're saying that the FDIC shouldn't go above $250,000 per account and actually rescue some of the depositors. What blame do you think deposits have?

Starting point is 00:25:00 The word bailout has been invoked recently, right? Right. And I think people have, since we are 15 years away from 2008, we've lost what the word bailout really means. And so this was a big line in the same. sand that was drawn that people were picking a side on. As a depositor, as a customer of a bank, does the word bailout mean something to you or are you just a client who needs to get your money back? And I don't think in 2008 the word bailout ever meant about that was always directed

Starting point is 00:25:30 towards the management and shareholders. In 2008, shareholders of banks got bailouts. In what's happening today with SBV and Silvergate and the other banks, all equity holders are going to zero. They are not getting bailed out. Customer deposits, the only thing that really seems to be changing here is that the FTIC insurance number of a quarter million dollars is being temporarily expanded to infinity, as in if you are a customer, you are not bearing any risk whatsoever of the bank. And this is because the banking sector is at this point a public institution. It is a public private agreement between the Fed and the Treasury and all the commercial banks that are out there. And so if you are a customer of a bank inside of the United

Starting point is 00:26:14 States, you effectively, meaningfully are a customer of a public institution. And so if one bank fails, that doesn't mean you, the customer, lose your money for taking risk. No one really thinks themselves as taking risk when they deposit their money in a bank. And other people were like, oh, like other people on crypto Twitter that I was seeing, perhaps like the anti-capitalist left to cast a wide net over these people, say like, oh, these are all just, like millionaire, billionaire startup people, like if they get wiped out, it doesn't really matter. It started to get politicized, but that conversation didn't really go forward anywhere. I think people came to consensus that the word bailout specifically means for the management

Starting point is 00:26:55 and shareholders of a bank. And these people are getting zero. They are getting nothing. They are getting wiped out while all customers are being made 100% whole. Yeah. And I look, I think that there's also some recognition that, um, Silicon Valley Bank, if you don't stop it here, and you just dismiss that as, oh, those are the tech bro deposits. We don't care about them, right? Well, next up is going to be your bank, like, down the road. Maybe it's the funds that you keep in Wells Fargo or Bank of America or something else.

Starting point is 00:27:28 Like the contagion would spread. And that was the real concern over the weekend. I feel like we're maybe front running a little bit of this because what happened was the bank run on Friday, right? And then eventually, was it announced late yesterday? The Biden administration announced that they would make sure, make all depositors in Silicon Valley Bank whole. Do we want to share that side of the story? Yeah.

Starting point is 00:27:51 So a joint statement came out really at the final hour. Sunday evening, I believe at 6.30 p.m. Eastern time. It could not have been any later because markets need to be. It could have been on Monday morning, right? I guess. So if it was still on Monday morning, Asian markets were going to open. and that was going to start to create, you know, the contagion, right? So, you know, finance is a global event, right?

Starting point is 00:28:14 And so Asian markets needed to be quelled before they opened up. And so basically at the final hour, they were, the idea here is that the Treasury FDIC was looking for a buyer to step in to buy Silvergate Bank. But that would have to have to. You mean Silicon Valley Bank, not Silver Gate, right? Excuse me. Yes, SVB Bank, yes. A buyer did not show up in time. I'm sure the assets under Silicon Valley Bank are great.

Starting point is 00:28:40 But the idea here is that they were waiting for a buyer to step in, didn't happen fast enough. And so at the final hour, they issued this joint statement from the Department of Treasury, the Federal Reserve, and the FDIC. So I'll read out a select few paragraphs here. After receiving a recommendation from the boards of the FDIC and the Federal Reserve and consulting with the president, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon

Starting point is 00:29:04 Valley Bank in a manner that, fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13th. No loss is associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. Put a pin in that one because we're going to come back to that one. Yeah, how is that possible? Yeah, how is that possible? So the punchline here is, babe, wake up, a new form of QE just dropped. We'll cover that. We are also announcing a similar systemic risk exception for signature bank. That is also extremely something that we need to pull in here. Let me go find this. That actually section here. Signature bank. No one knew that we were worried

Starting point is 00:29:46 about signature bank. It was Silicon Valley Bank that we're worried about. And so in this press release, they also say, hey, not only have we seized and paused and taking control over Silicon Valley Bank, we are also doing it for Signature Bank. Signature Bank is the other main big crypto banking, crypto banker after Silvergate Bank. It's actually like, remember we found this out last week? Ten times bigger. It's ten times bigger. Ten times bigger.

Starting point is 00:30:09 And so signature bank was closed by its state chartering authority. All depositors of this institution will also be made whole. And with the resolution of Silicon Valley Bank, also no losses will be borne by the taxpayer. So two banks are getting seized by the FDIC. All depositors being made whole. Equity shareholders getting wiped out. They follow up and say shareholders and certain. Unsecured debtors will not be protected.

Starting point is 00:30:34 Senior management has also been removed. So this is the, there is no bailout line. There's no bailout like in 2008. Any losses to the deposit insurance fund to support unsure depositors will be recovered by a special assessment on the bank. So that's really the punchline here. All creditors, all depositors into these banks are totally fine. All equity shareholders and risk takers are totally wiped out.

Starting point is 00:30:58 So Treasury stepping in and saying, okay, we are not going to let this contagion continue. We're not going to leave it in question whether deposits get protected or not or guaranteed or not. We're just going to guarantee all depositors of Silicon Valley Bank so that contagion doesn't spread, right? So stepping in, and that's probably a good idea, right? They're also saying, though, maybe this is part of what you wanted to put a pin in, that it won't cost the taxpayers anything. Let's talk about that. Yeah. Right. Okay, so the bank's solve it. There's no money in the bank. I run on the bank happen. There are securities and treasuries that are worth certain amounts. And so it's absolutely worth saying it's worth saying that

Starting point is 00:31:40 like the value of what is on the balance sheet of these banks are strong. They just can't, there's time to maturity, right? They have to wait for those things to actually discover their value. They may be underwater, but they're not underwater like, you know, Luna Terra underwater. Like, it's not going to zero. Where there's nothing there. Right. Most of the is there. It's just like this time to maturity thing is the issue. And so there's there is a lot of, but regardless, depositors need to withdraw immediately. And so this is where this new form of QE is coming from, which we'll talk about later in the show. And so this is a Tarun Chitra who tweeted out, I think this is from a Bloomberg terminal saying, this is a member of the signature bank saying that I

Starting point is 00:32:25 think if we had been allowed to open tomorrow, that we could have continued. We have a solid loan book were the biggest lender in New York City under the low income housing credit, said former Crogressman Barney Frank, a signature bank board member known for the Dodd-Frank Act, which overhauled U.S. financial regulation in the wake of the global financial crisis. I think the bank could have been a going concern. So a member of signature banks said that we probably were good, but they seized us anyways. So this is part of where this, is this an attack on crypto question comes in? So that's the first question that we're posing again. Was this a legitimate anti-contagent effort?

Starting point is 00:33:02 Probably. Was it also an attack on crypto? And also, since the $250,000 federal deposit insurance number is being completely neglected, what's the real number? It's a real number just infinity now? Like, all deposits are now completely insured across all banks at all times, because that's kind of the precedent being set here. I think the answer to all those questions seems to be like, yes.

Starting point is 00:33:27 Yeah. This is what it seems. they were stopping the contagion, right? FDIC limit of 250K, that's the letter of the law. It's not actually what's going to happen. If there is bank contagion, the threat of bank contagion, then any deposit that you have in a U.S. bank account is good. It's solid. You're good. They're going to insure that up to the whatever amount, infinity amount, whatever amount they need to be. And then also, yes, David, I'm concerned that this is an attack on crypto. And I'm wondering, and I'm worried about this, This hasn't been the case yet that we've seen.

Starting point is 00:34:00 But there was the Biden tweet last night. I don't know if you read that where he said, we're going to hold those accountable. This one. Yes. I'm firmly committed to holding those responsible for this mess fully accountable and continuing our efforts to strengthen oversight. Who is accountable for this mess in Biden's mind,

Starting point is 00:34:21 in the Treasury's mind, in the Fed's mind? Do you think that they're going to investigate inside the house? like the call is coming from inside the house, are they going to like go to Powell and be like, hey, you caused this? Maybe a little bit. But are they also going to look for external actors to kind of smear? And who will those actors be?

Starting point is 00:34:40 The fact that they are preemptively closing signature bank is not a good sign for crypto. Because if you believe, who is that? Was that Barney Frank on the board that you just read? If you believe him, he was saying, hey, signature was fine. We were going to weather this storm, not a big deal, and they are being targeted for what reason? I mean, signature bank is essentially a crypto bank here.

Starting point is 00:35:06 Yeah, yeah. And Nick Carter is responding to this Biden tweet saying, I'll crack the case for you, Congress and your own administration for causing the inflation net made the Fed hike 500 bits and plunge all banks into insolvency is what is responsible for all this. So the idea that the Biden administration is going to go hold those accountable when it was like Elizabeth Warren stoking fears that was one part of this. The Federal Reserve raising interest rates super fast. That was another part of this. Like it's part of this whole entire apparatus and the own administration is here to blame. Not that like a different administration would have done anything different, but like raising interest rates way too fast. And then Elizabeth Warren being very scary about the crypto banking sector.

Starting point is 00:35:51 has a lot to do with it. Yeah, but what I'm saying, David, is too, is I think that they are prepping to throw crypto under the bus here. Sure. Oh, I think the headlines, if you read mainstream media, are all ready to say. The bet on crypto is what felled Silvergate and Silicon Valley and signature. Okay. But right now, Ryan, banks in this morning of trading started popping circuit breakers left and right.

Starting point is 00:36:20 So the, there's a, not, what is that? What is this down 74%? My God. So look at this. So here at the top, we have JPMorgan down 1.5%, right? Goldman Sachs down 1.9%. See, I think a city group down 3.5%. Those are all the big ones, right? The big ones are fine because they're too big to fail, aren't there? And then there's other ones that are down 5%, 9%, 8%, 65%, 75%, 75%, 75%, 26%. So what's happening? So what's happening? So what's happening? here is there is like a flight here's all all the circuit breakers that just got halted on the new york stock exchange all in the banking sector uh and so first republic bank is the one that's down like 75% and other u.s regional national banks are their equity values the share share prices are just getting hit brutally well that's because shareholders are getting wiped right now aren't they bank shareholders so not

Starting point is 00:37:13 not on all of them but people are now realizing that equity could be they could be if there is indeed to run on the banks because there's no bailouts coming for these regional banks. And so small to middle tier banks are getting absolutely pummeled right now because everyone realizes that FDIC deposit insurance is infinity. It's infinity. And so like all of the value of risk taking and the equity shares of these banks is like, why would you take that risk? And so I mean, stock prices of again, middle size or small size regional banks are down.

Starting point is 00:37:49 Whereas the big banks are kind of totally fine. Here is XLF, which is the sector for the banking sector, the banking financial sector. And so as you can see, this is, here it is on Tuesday. And here it is now. The banking sector as a whole is down 12%, which I mean, in crypto is kind of changed. But I mean, this could be good news for the big banks, right? For the big banks. Well, because it's consolidation, right?

Starting point is 00:38:12 Yeah. There's a flight to safety. There's consolidation here. So here's David Sacks takes from the Allend podcast. the Fed may or may not realize it, but it has created a two-tier banking system. Tier one, systemically important banks. These are the two big to fail banks. If you have money there, it's a true deposit, you can't lose it.

Starting point is 00:38:29 Tier two, everyone else. If you have money there, it's not a true deposit. It's an unsecured loan to the bank. You can lose it in a bank failure. And so I think this is what people are worried about is what the president is. Well, he put that tweet out. It looks like he put that tweet out before the FDIC came and kind of bailed out all depositors. This is true. But I do think it carries that like the tier two is everyone else whose

Starting point is 00:38:54 shareholders could get completely wiped. Right. Shareholders are not are taking are all the risk here. All the risk. They're bearing all the risk. Depositors are bearing none of it, it seems like. Yeah. And so here's a tweet from a Jake Chravinsky, which I think is actually like the great point to focus on as it relates to crypto banking. Jake says the closures of Silvergate, Silicon Valley Bank and Signature create a huge gap in the market for crypto-friendly banking. There may be banks. that can seize this opportunity without taking on the same risks as these, the question is if banking regulators will try and stand in their way. So now that these crypto banks are gone, and signature is gone, right, David? Signature is gone. It is gone. So, and this just happened,

Starting point is 00:39:34 this was news as of yesterday. So we didn't know this on Friday, that along with SVB, that Treasury and FDIC was stepping in to signature and wiping out shareholders again, but protecting deposits. their funds. We don't know why they did that. But like that is, this is the crypto banking sector. Right. These three banks. Yeah. So, so, so Yanow from Blockwork says, with Silvergate and Signature gone, here are some crypto for any alternative banks. Bcb, Cross River customers bank, Jewel, Mercury series, not perfect solutions, but should get the job done. For how long, though. Is this how the cards fall? Yeah, and for how long. Like, is Liz Warren done or is she coming after these next? You know?

Starting point is 00:40:17 Well, yeah, I think that's the question of where this contagion could spread. Wow. So a lot's happened. Do you feel like this is contained right now? I know we're going to talk about USDC. But as far as the banking sector itself in the U.S., are we contained? Or is, you know, are we, what can we expect moving forward? What have you kind of heard in peace together?

Starting point is 00:40:41 Well, I think with this announcement that happened Sunday night, that was the containment, right? it was a complete and unquestioned, unconditional protection of all deposits of anywhere in any bank account ever, at least in this acute crisis that we are happening. So no one that, no one who has money in a bank should be scared. And now that bank run fears are probably completely over because why would you fear it? Because they're just saying they're pulling out an infinite insurance fund for any deposits. the net effect of this is showing up in banking equities, right? Instead of people losing money, like all of these small to mid-tier regional banks are taking the losses. That's why all these things are red.

Starting point is 00:41:22 So depositors completely in the green, or at least not zero, which is fine. That's what they expected. All of that risk and all of that loss is being transferred from depositors over to equity holders of these small to middle-tier regional banks. And then the big banks are like, oh, we don't care. We're totally fine. Is a contagion done? Yeah, right?

Starting point is 00:41:44 That's the whole point of the whole FDIC statement. The contagion's over. Now it's just there's a complete reshuffling of what it means to be a bank inside of the United States. The contagion's over for the depositors, it seems like, but we don't know how bank shareholders will fare or the banks themselves will fare. But the market is interpreting this as good news if you are too big to fail bank. Yes. Yeah.

Starting point is 00:42:06 Well, at least, yeah. So like they're being dragged down just by association. but if you're a bank and you're only down 1.5% today, you're doing just fine. Wow. Well, what else we got coming up, David? We're coming up. We're going to talk about USC. Actually, we'll bang out some USC stuff right now.

Starting point is 00:42:23 So what was at risk was $3.3 billion of the $40 billion of total USC reserves were at Silicon Valley Bank. And so this is when Stablecoin started to suffer, lost their peg, right? So I took the screenshot this morning. Have you ever seen? Stable coin charts like this in the bottom right here. The closest was, the closest was like three years ago this time when Dye was trading. It wasn't U.S.D.C. But Dye was trading off of its peg and it went down to like 92 cents or 93 cents.

Starting point is 00:42:53 Yeah, but even that was slow. It was a slow peg, slow rise. Right. And this is USDC, which has always been perfectly redeemable for a dollar, fell all the way down to like 98 cents. And it was trading out of, trading down. of a scare that basically its deposits in Silicon Valley Bank wouldn't be redeemable. And so, you know, the issued USC was unbacked for a period of time. Is that why I was trading down?

Starting point is 00:43:22 Yeah. Yeah. So it got as low as 88 cents, which I think is irrationally low. But it got there anyways. And so this was really what was at stake. And this is why crypto market sold off. It sold off because USDC was under threat. Dye is basically one-to-one pegged to USDC. And so those two big stable coins went down to 90 cents or so.

Starting point is 00:43:47 And then also Silicon Valley Bank is the bank for many, many startups. You and I, we started getting messages from our angel investment saying, hey, just after I, we were totally fine. We didn't bank at Silicon Valley Bank. That was best case scenario. Others would be like, oh, yeah,

Starting point is 00:44:00 we totally bank at Silicon Valley Bank. were kind of, we're praying, basically. So that's what this last weekend was for so many startups. And so these are all crypto bullish and crypto-adjacent people. And so, but it really directly impacted the crypto markets through USC. Jeremy Alleyer put out this tweet yesterday at 7.20 p.m. about one hour after the news that the FDIC was going to come and provide infinity insurance. And he just says, 100% of USC reserves are safe and secure.

Starting point is 00:44:31 and we will complete our transfer of remaining SVB cash to BNY Mellon. So all of circles, deposits that back USC are going from Silicon Valley to their other bank, BNY Mellon. Bigger bank. With a closure of signature bank, we will not be able to process minting and redemption through Cigna and will be relying on settlements through BNY Mellon. Additionally, we bring on a new transaction banking partner will automate minting and redemption potentially as soon as tomorrow, that's today.

Starting point is 00:44:59 And we are committing to building a robust and also. automated UCC settlement and reserve operations with the highest quality and transparency. So USC getting completely off, completely solvent, just picking new banks now. Were you ever worried about USC like this weekend? How worried were you? I think the worst case scenario that I envisioned was that their deposits go to zero and all USC just takes a haircut. So like one USC becomes worth like 93 cents or something like that. I think that was the worst case scenario. Other people were like dooming that it's going to zero and that never really made any sense to me. What about you? Yeah, I agree that never made sense to me.

Starting point is 00:45:35 But even like it only being worth 90 cents didn't make sense to me unless the Fed decided to not guarantee depositors at Silicon Valley Bank and also not just that. That wouldn't have been enough. And also go and target crypto or go and or the crypto banking sector like signature, for example, was also underwater in the same way that Silicon Valley Bank was. So it felt like there were even a lot of steps necessary to make USDC only worth like 90 cents potentially. I do feel like the market responded irrationally about that. And I thought all weekend I was kind of a little,

Starting point is 00:46:18 I was more relaxed about this because it seemed obvious to me that Treasury would have to step in and stop this contagion of the source. You just can't have a bank run on a top 20 bank in, the U.S. Right. In this, in this climate where you have interest rates, you know, above 5%. And you have a lot of other banks that are looking at Silicon Valley banking,

Starting point is 00:46:38 and being like, oh, God. And then the fact that you mentioned Jim, Jim tweeting earlier was like, now we're in web two banking essentially. So you can just deposit on a dime. That's what everyone was preparing to do on Monday morning. Yeah. Yeah, that's right. And I think if you do this math, 3.3 billion of the total 40 billion of U.S.

Starting point is 00:46:59 reserves were under threat at SVB. So that is 8.25 cents on the dollar for one USC. So if that went to zero, you would have a 92.5 cents or 91.5 cents U.S.C. But again, remember, SVB, it's not like they didn't have nothing there. Like, they were had plenty of total. They had like 90% of the 100% or something like this. And so like the idea of USC losing even, you know, close to 10 cents was never going to happen. Crypto is just jittery, man.

Starting point is 00:47:30 They're like, oh, does, like, crypto learned a lot about. It's super reactionary, yeah. Crypto learned a lot about banking, I think last week. I mean, we just lived in 2022. We lived through a stable coin called, you know, USDT, the Lunarra ecosystem that dropped to zero, right? Right. We saw FTX, which was like a crypto bank that had nothing backing its deposits. And so I think people in crypto sort of extrapolated that to the U.S. banking system.

Starting point is 00:47:56 And we're like, oh, USDA could drop to zero. Yeah. And now USDC to USC conversions are completely online and operational. And this is Coinbase tweeting this out. So USC crisis inside of two and a half days, completely fine. And I wouldn't even call it a crisis in the first place. Okay. So coming up next, we've got to talk about the markets because crypto is up big.

Starting point is 00:48:20 And also we have to unpack. We've got 10 year, the 10 year treasury falling down below the 200 day moving average. down to three and a half percent. We'll talk about how that's actually kind of a solution to the problem that created it in the first place. We'll talk about, is this an attack on crypto? And what are people saying all about that? And really, the punchline here is that,

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Starting point is 00:51:53 under 50 cents a day and provides a wealth of knowledge and support on your journey West. I'll see you in the Discord. We are back. And as of this morning, the 10-year yield has fallen below 3.5%. 3.5%. And so yields are coming down, which is actually, ironically, a huge solution to what is causing this bank run in the first place, this banking crisis, is that yields got too high. And these treasuries and asset-backed securities that all of these banks bought, because interest rates went up, the value of these things went down. So yields are going down to 3.5%.

Starting point is 00:52:29 The Fed Fund Futures is now showing a 60% odds, 60% chance of zero BIPS increase in the next, in raising the interest rates. So now there's a 60, the market is pricing a 60% chance that we do not increase yields. That's up from 35% it looks like. in the last, you know, 12 hours or so. Right. And so, Ryan, the market is saying the Fed is done. Something broke.

Starting point is 00:53:01 So many people, now all the macro people that we've had on over the last year have said, the Fed is going to raise interest rates until something breaks. Something broke. I think something broke. Yeah, you can't just keep raising interest rates until you have bank runs across the country, right? So this has to affect their policy moving forward. Yes, that's exactly right. And so people are now, and this is, I think, part of the story of why crypto is absolutely ripping today.

Starting point is 00:53:27 Ether is almost at $1,700. Bitcoin is at almost $25,000, $24,350. And so the market is starting to price in a Fed pivot. Not only that, but we have a new form of QE. And so this is Caitlin Long, who's saying the big four U.S. banks just got a $210 billion Fed bailout. How? Fed's new bank insurance program. this is the new insurance program that they came that they come up with to help

Starting point is 00:53:55 ensure the depositors, that new facility is allowing banks to borrow against the negative collateral value shown on this graph at par instead of the actual market value. So that time to maturity, banks are allowed to borrow against their assets at the time of maturity, not the time, not the value of that they currently are. That just happened yesterday. That just happened yesterday. I want everyone to know this. So part of that press release, wasn't just that depositors at Silicon Valley Bank's signature would be safe, and so are all depositors in the U.S. system, but they also kind of like snuck this in, which is basically that these securities would be valued, not at their market value.

Starting point is 00:54:40 Not what they can be sold for in the secondary market. But at their par value, right? So that's as if you bought a house for, say, $100,000 or something. And the market dropped, it's now worth $60,000. But for whatever reason, the U.S. banking system decided to say, whatever, the market price isn't right, $60,000. Right. We'll give you a loan based on a home equity loan based on the $100,000.

Starting point is 00:55:05 That's what they're doing. The $100,000 plus all of the rental income you could be getting over the next 10 years. Right. That's what the par value is, essentially. And so that is a huge QE measure to the entire U.S. banking system. I haven't fully wrapped my head around what this means, but that was kind of snuck in there. And they're doing this so that another Silicon Valley bank doesn't pop up. Right.

Starting point is 00:55:29 Exactly. They're doing this because people need liquidity. And so they are offering liquidity to the highly capitalized banks in a way that allows, basically this is a form of QE. This is a sneaky form of printing money that isn't actually the money printer. So this is why I led this section, this tweet with like, Babe, wake up, a new form of QE just dropped. They love new forms of QE. Money printing that doesn't actually appear like money printing. This is taking equity values of assets that don't exist and allowing people to borrow against them.

Starting point is 00:56:01 It is a new form of money creation. It's basically so that all the other Silicon Valley Bank situations where they purchase too many long dated securities, right, and now they're kind of underwater. It's so that that doesn't happen again. That's right. Because Silicon Valley Bank could just like rinse, wash, repeat for every weekend bank in the year. US who did this kind of maneuver and there are probably many of them. And so this kind of, but it is, how are they going to pay for this? Money supply. It's essentially it. Yes. Okay, so we have treasury yields coming down, which means risk taking can go up, right? We have the Fed funds futures now showing 60% odds of not increasing. Right after the Fed said like, hey, we're totally going to

Starting point is 00:56:42 increase by the way, but and not even a little bit by a lot. Remember that was last week? The Fed last week said, oh yeah, we're going to increase it by more than 25 vips. Today, the market is pricing in 60% odds. They're not doing anything. We have this new form of QE coming. So what does crypto do? What's crypto do, Ryan? Bitcoin is up 12%. Ether is up 9%. BNB is up 8%. Crypto is green across the board. And this is one of the first times, Ryan, that I've actually seen crypto price action be related to the actual point of crypto in the first place. which is self-custodied bearer asset instruments. Crypto is being priced by its fundamentals.

Starting point is 00:57:26 It's so good to see. Yeah. I mean, not only did we just say that USDC is safe, which is obviously good for crypto. If that had not have been safe, not only would have been terrible for the US banking system, would have been terrible for USDC, and I think crypto would have gotten hit on top of that.

Starting point is 00:57:41 We also have seen that the Fed pivot is in full motion. And then we've also seen this is the thing that crypto is built to prevent is bank runs, contagion. This is what Eiff and Bitcoin do very well. Where DFI, you can see kind of all of the assets that back any kind of lending or borrowing asset on chain. You can see all that. You have full transparency. You can't get these types of bank runs in crypto. So the use case has just been proved out even more.

Starting point is 00:58:13 So Ryan, here is where we finish the weekly roll up last Thursday. There's the candle that happened right after we recorded the weekly roll up. Ether went down as low as 17% down 17% since we recorded last Thursday. But it's actually ending the weekend, excuse me, up 2.5% as ether. Here's Bitcoin. Bitcoin's actually up even better. So Bitcoin is doing the same thing. Bitcoin is up about 4% since.

Starting point is 00:58:43 we recorded last Thursday. Here's the USC price. Look at that. That is nuts. That is absolutely crazy. Zoom out, zoom out. What do you mean? Zoom out.

Starting point is 00:58:54 Just keep zooming out. I would see. It's like, look at this. That's a silly chart. It's very, very silly. So USC gets as low as, man, as low as 88 cents. And now it's back up.

Starting point is 00:59:07 It's actually over a dollar. Oh, no, it's not. 0.999 cents for one USC. Wow. Joe Wisenthal tweets up. Bitcoin is up about 10% in last 24 hours. One of the cleanest divergences versus other risk assets that I can recall. And I just love this one, man. Look, Bitcoin up 9%. ETHER up 6%. Carlschwa Bank down 9%. East West Bank Corp down 16%. Financial Corp, down 18%. Banks down crypto assets up. You'll love to see it. Not only this, though. Uncorrelated. CZ has said that he is going to convert the one billion industry. industry recovery initiative funds from BUSD into Bitcoin and BNB and Eath. And so CZ's market dumping BUSD for crypto assets. Well, this is great. Do you remember that there were, okay, so another byproduct of this that we'll be talking about, I'm sure in the weeks to come, is there was a threat at one point in time that centralized stable coins like USDC would

Starting point is 01:00:09 essentially eat the money use case of crypto. So why do you need Bitcoin? Why do you need ETH if you have a stable coin on chain, right? All the monetary premium will kind of leak into stable coin assets. This is showing why that can't be the case and why that won't be the case and why Bitcoin and Ether and crypto-native assets that aren't dependent on any external banking system, why they will always be core monetary units of crypto. And this is providing more strength to them and less strength to the stable coin use case. Are you ready for a meme?

Starting point is 01:00:44 Yeah. Corporate needs to find the differences between this picture and this picture. One picture on the left is all of the banking stock circuit breakers popping off because they are down bad. And then Bitcoin absolutely mooning. And apparently, according to NLW, these are the same pictures. I just love it when bankless assets moon while banks get hammered. Not that this is, I'm not happy about that in the banking sector. This is a fault of so many other things.

Starting point is 01:01:11 but this is the net effect of that. Right. And so, Ryan, I think this brings us to the last part of this conversation, which was, was this an attack on crypto? Was what? We should have, we should define with, is, are you talking about the signature bank portion of this or like the Silvergate portion of this or what portion of this? Because it's not all an attack on crypto.

Starting point is 01:01:33 I almost feel like it's in the cap, cap of like camp of, um, an opportunistic attack on crypto, if you will. I think that's right. I think that's right. But it's worth pointing out that January and February were marked by Operation Choke Point, right? They were coming to debank crypto. And then fast forward to March, the crypto banks are taken, are seized by the FDIC. Like it was an opportunity to attack, but attack nonetheless.

Starting point is 01:01:57 So that's really how this 2020 started. And now we're 13 days into March. And our three biggest crypto banks got seized. So like how was the net effect of that? Well, like crypto banks are crypto is now being debanked. It's being debanked in the U.S., right, which slows down the fiat inflows crypto in which is a bad thing in the short run. But I wonder if it's not a good thing in the long run, David. I mean, there are elements of have we become too dependent on the U.S. banking system.

Starting point is 01:02:25 This really shows the strength of Ethereum and Bitcoin. Like, they can debank U.S. citizens for a period of time, but you can't debank crypto. Crypto is the bank. The capital will find a way to leak back into crypto like it always does. and crypto will continue to grow and grow and grow. Over the long run, you really can't debank crypto. And I don't think that those trying to, I guess, choke off crypto in the U.S. fully understand this. Yeah, I think that's right.

Starting point is 01:02:55 But I think also at the same time, we're going to be hearing this narrative. Like, we already are seeing the headlines of bank fails because of crypto. Bank fails because of crypto. Those headlines are left and right. And so Brian Quintens tweeted out, so the Federal Reserve Hikes are, heights rates by 400 basis points in 12 months. That's 4%. Sending all asset prices into a tailspin, inverts the yield curve the most since 1980, causing large regional banks like Key Corp to raise alarm bells on funding costs. And crypto is the problem. And so he's saying like, why crypto should

Starting point is 01:03:26 not be the problem? This is a result of all of these endogenous factors that have nothing to do with crypto, right? Here's Nick Carter saying, dear God, Barney Frank openly admit that, signature was arbitrarily shuttered despite no insolvency because regulators wanted to kill off the last major pro-crypto bank, Colossus scandal. This is linked in a CNBC article. This is linked in a CNBC article. Let me see if I can find this. I think part of what happened was that regulators wanted to send a very strong anti-crypto message, which is why Silvergate was taken down. They're just saying the quiet part out loud in public fashions, right? And so this is your tweet from this last weekend, Silvergate, SVB, Signature Bank, these are banks. Banks had to be shuddered,

Starting point is 01:04:21 not crypto. And so the narrative here is that they're going to try and blame crypto. And we have to remind them that it was actually banks that failed, not crypto that failed. I'd be happy to. This is where the battle for hearts and minds come in, because I think there's going to be a narrative battle in the coming weeks and months between those that want to blame crypto for this. and we who want to show that crypto was the thing that was standing at the end of this. It was the banking system that has failed, not crypto. But I think this is going to be a narrative battle for hearts and minds and a fight for mainstream, like the mainstream narrative.

Starting point is 01:04:58 What does the average American citizen actually believe at the end of this? Yeah. Here's Miles Jennings, who's the legal counsel at A16C. the Fed shooting the absolute hell out of the U.S. banking system and then turns to the camera and asks, why would crypto do this? That's such a good meme, man. That's a great meaning. I love that.

Starting point is 01:05:20 Well, that's where we are right now, David. Is anything else you want to say in summary and closing? That's all I got, man. That's all I got. What a weekend, guys. We hope this helped get you up to speed. David, what are we doing tomorrow? We're bringing, David and I are not banking financial system experts.

Starting point is 01:05:36 We know a thing or two when we can piece a story together. and we know how it intersects with crypto, but we are bringing on someone who does tomorrow for state of the nation. Who's coming on tomorrow, David? And what are we talking about? Yeah, we are bringing on, apologies in advance, Ram for butchering your last name. Ram Alualia, who is a capital market, banking sector, expert, at least far more than we are, who also very much understands the crypto world as well.

Starting point is 01:06:00 And the agenda that I made for that show, Ryan is already obsolete. So I'm going to have to make another one tonight. But as the events continue to unfold for the rest of the, the day to day. The market doesn't close for another 20 more minutes or an hour, 20 more minutes. I don't know. Tad markets. But all of the things that happen today are and all of the news that's going to be projected out the next following months or so. We're going to talk about that all throughout the state of the nation tomorrow. There we go. The contagion seems to be stopped for now. USDC is fine. Crypto held up during the storm as it always does. It was a crazy weekend.

Starting point is 01:06:34 A lot of uncertainty for a lot of folks. Seems to be mainly resolved. But I can't. help but ask myself, ask the question of, is this all over? Have we seen the last of the of the banking contagion, I should say. We'll see. It does seem like a Fed pivots on the way, but will that be enough or will we see some other cracks form before the end of all this? We'll have to see. Yeah. I think the last thing I'll just say is like, yo, if you are the crypto class of 2021 and 2022, man, you guys have earned your stripes. You guys have experienced a lot. Yeah. Your first run.

Starting point is 01:07:08 Yeah. There was a time where I thought, oh, clap, you'll never match class of 2018, 2019 in the hell that we live through. But like, I don't know. This is a bad one. This is pretty bad. And you're seeing it all. And hopefully getting a crash course on how our money system works as a result, which is only a good thing moving forward. David, you're doing, you're getting off of this in the next 15 minutes.

Starting point is 01:07:32 And you are doing a Twitter spaces for the Brian Armstrong. bankless collectible, right? What's coming up there? That's exactly right. Yeah. So we are always, Monday Mintz, the podcast NFT that goes with every Monday podcast that space is starting in 17 minutes. Are you going to be there? I don't think I can make it. I got to go do something else. Go talk to somebody about something else. Not to be obscure, but we just had a killer episode with Brian Armstrong. So if you guys are completely done with all of this banking and contagion talk and want to talk about some crypto things and all of the cool things that Coinbase is doing, that Twitter space is starting in 17 minutes.

Starting point is 01:08:06 Yes, and it's your opportunity to mint and collect the Brian Armstrong NFT podcast. Guys, we'll end it this way with risks and disclaimers. We usually say crypto is risky. I don't think that fits this episode. The U.S. banking system is risky, all right? Banks are risky. You could lose what you put in. Hopefully it's FDIC insured.

Starting point is 01:08:26 But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - SVB Banking Crisis, Fed Pivot, BTC ETH price action📈

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