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‘The Collapse of Silicon Valley Bank: A Major Blow to the Tech Industry’


In a time of economic uncertainty, the collapse of Silicon Valley Bank (SVB) is a major blow to the tech industry.[0] On March 8, SVB’s parent company, SVB Financial Group, announced it had sold $21 billion of assets at a $1.8 billion loss, and was going to sell $1.75 billion worth of shares to help plug that hole.[1] This caused panic among SVB’s clients, leading to a bank run and leading to the Federal Deposit Insurance Corporation (FDIC) taking control of the bank.

SVB had a business model that was heavily concentrated in the tech industry, both venture capital and private equity, and so was more exposed to potential losses than other banks.[2] As a result, when the tech industry started to falter, it very quickly became a problem for the bank.[2] Moreover, because the FDIC normally only insures up to $250,000 of deposits, many customers who had more than that in SVB were in a bind.[3]

In response, the Treasury Department, the Federal Reserve, and the FDIC announced that they were taking “decisive actions” to protect the economy and shore up confidence in the banking system.[4] The representatives promised that all of SVB’s depositors would be able to access their funds the following day, not just those with deposits up to the FDIC-guaranteed $250,000.[4] On Sunday, New York regulators closed Signature Bank, which had begun offering crypto services, and the federal government stated that all depositors’ funds would be safeguarded.[4] The Fed said it was also going to open up a facility to make funding available for other financial institutions in the form of one-year loans to try to limit contagion across the banking sector and to stave off other bank runs.[4]

The collapse of SVB is the second-largest bank failure in US history and the largest since Washington Mutual went under in 2008.[5] It has sent shock waves across the tech sector, and while smaller depositors are safe, many customers who had more money in the bank have been left in a difficult situation. The FDIC, Treasury Department and the Fed have taken measures to protect the economy and shore up confidence in the banking system, but the long-term effects of the collapse of SVB are still to be seen.

0. “Silicon Valley Bank failure could wipe out ‘a whole generation of startups'” NPR, 11 Mar. 2023,

1. “Silicon Valley Bank’s failure, the government’s depositor rescue, and venture capitalists’ incredible tantrum.” Slate, 13 Mar. 2023,

2. “What is Silicon Valley Bank? The bank’s collapse, explained.”, 15 Mar. 2023,

3. “Silicon Valley Bank Bailout is Socialism for the Rich” Washington Free Beacon, 13 Mar. 2023,

4. “Silicon Valley Bank bailout: Did the government just bail out SVB and Signature?”, 13 Mar. 2023,

5. “Gavin Newsom hides ties to failed Silicon Valley Bank in statement praising Biden’s bailout” Fox News, 15 Mar. 2023,

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