uk

BETA GLOBAL FINANCE: Silicon Valley Bank Collapse Favors Cryptocurrency and Precious Metals Markets

The collapse of Silicon Valley Bank, after revealing massive losses and failed capital infusion, was declared within 48 hours. This marked the biggest bank closure since the 2008 financial crisis and had significant short-term impacts on capital markets.

 

1. Why did Silicon Valley Bank reach this point?

In 2019, the Federal Reserve began implementing a loose monetary policy, causing Silicon Valley Bank deposits to surge from $61 billion in 2019 to $189 billion in 2021. In pursuit of increased investment returns, the bank aggressively purchased large amounts of fixed-income investment portfolios, especially mortgage-backed securities with maturities of over 10 years.

 

In 2022, the Federal Reserve rapidly raised interest rates, causing bond prices to plummet and resulting in substantial paper losses for Silicon Valley Bank's investment portfolio. In simple terms, the loose monetary policy of the Federal Reserve led to a surge in Silicon Valley Bank deposits, while the rapid interest rate hikes caused significant losses and liquidity shortages, leading to its sudden demise.

 

The fundamental reasons lie in two points: the Federal Reserve's policies and Silicon Valley Bank's investment methods.

 

2. Will this event lead to a new financial crisis?

Many investors may wonder if this event will trigger a severe financial storm, considering the rapid collapse of Silicon Valley Bank compared to the 3-month buildup before Lehman Bank's collapse in 2008.

 

The collapse of Silicon Valley Bank was due to a liquidity shortage, unlike the debt crisis that led to Lehman Bank's collapse. The nature of the two events is different, with liquidity shortage being easier to resolve by timely liquidity replenishment. Therefore, the probability of triggering a financial crisis due to Silicon Valley Bank's collapse is low, and investors are advised not to panic.

3. What impact will this event have on major markets?

1) Impact on the U.S. tech startup industry

Silicon Valley Bank was the largest bank in Silicon Valley with business ties to half of the U.S. tech companies, many of whom hold deposits with the bank. The bank was considered the heart of the U.S. tech industry, providing essential funding for startups and investment funds. The sudden collapse of Silicon Valley Bank, with funds locked and inaccessible, may result in many startups unable to pay employees or face closure, inflicting a lasting wound on the U.S. tech startup sector.

 

2) Impact on U.S. small and medium-sized banks

Issues exist in Silicon Valley Bank that are present in varying degrees in other U.S. banks. As Silicon Valley Bank was a star bank in the U.S., this event naturally stirs concerns among depositors about other small and medium-sized banks. Inadequate government assistance could lead to spreading panic, intensifying worries about other banks and potentially causing a chain reaction leading to more bank bankruptcies.

 

3) Impact on the Federal Reserve's interest rate hike process

The collapse of Silicon Valley Bank is closely linked to the Federal Reserve's rapid interest rate hikes. This event serves as a warning to the Fed that interest rate hikes come with costs and may have serious consequences at any time, putting the Fed in a dilemma. Over-hiking rates could potentially reveal new financial risks anytime, while insufficient rate hikes may hinder lowering stubbornly high inflation.

 

4) Impact on the U.S. dollar and forex markets

In this current rate-hiking cycle, record-breaking inflation combined with such financial system risks suggests increasing backfire from these actions. Undoubtedly, financial system risks are escalating. The collapse of Silicon Valley Bank underscores long-standing concerns that the Fed's series of aggressive rate hikes may adversely impact the global financial system. Heightened risks and damage to the U.S. dollar's credibility directly influence the forex market. Lessons from the serious misjudgment of the consequences of the 2007 U.S. subprime crisis should serve as a caution.

 

5) Silicon Valley Bank Collapse Favors Cryptocurrency and Precious Metals Markets

This event will be a significant test for the global financial system. It spells severe bearish implications for the stock market and the dollar, favoring cryptocurrency and precious metals in the short term. Both cryptocurrencies and gold are expected to see short-term gains.

 

In comparison, the cryptocurrency market is the most favorable. After this event, market expectations have shifted, and Bitcoin has seen an upward trend reversal. This is because the cryptocurrency market is a relatively pure market, with policy effects being relatively straightforward, resulting in smoother trends and making it easier to seize opportunities. Unlike other markets with complex influencing factors that can complicate analysis and decision-making, trading becomes easier in a comfortable market.

 

4. BETA GLOBAL FINANCE Trading Center - The New Leader in the Cryptocurrency Market

Established after acquiring significant mining companies and integrating high-quality ICO resources in the industry, BETA GLOBAL FINANCE Trading Center aims to quickly seize the cryptocurrency market and become an industry leader through cutting-edge trading and investment functions.

 

Centered around users and targeting a global audience, BETA GLOBAL FINANCE Trading Center aspires to become the new leader in the global cryptocurrency market. Headquartered in the United States, the company has a broad service range and a global market presence. With a professional, efficient, and experienced blockchain technology and operations team boasting decades of internet development and service experience, a group of internet experts with unique insights and foresight is dedicated to providing users worldwide with a comprehensive service platform that is secure, convenient, stable, and cost-effective.

 

BETA GLOBAL FINANCE Trading Center is committed to creating a secure and reliable cryptocurrency trading platform. The team possesses decades of financial risk management experience, with core members educated at prestigious institutions like Harvard University, Yale University, MIT, and Cambridge University. Holding multiple financial licenses and continuously enhancing its global qualifications, the platform ensures long-term stability and safeguards venture capital investments.

 

Focusing on low commission contract trading and high-quality ICO projects, BETA GLOBAL FINANCE Trading Center boasts distinct advantages in the market. With plans for a future NASDAQ listing, the core operating projects include ICO and FOF mining pool projects. The ICO project leads the industry in investing in high-quality projects, becoming a focal point for many issuers and a popular choice for user investments. This project is poised to create numerous investment legends in the industry.

 

The FOF mining pool project is a combination investment project of high-quality mining machines, characterized by low risk and stable returns. BETA GLOBAL FINANCE Trading Center has comprehensively optimized the user experience with a system utilizing multi-point load balancing technology to maximize system smoothness and ensure multi-level server support for transaction speeds. User experience satisfaction with the trading system is benchmarked against top global trading systems.

 

With a financial-grade security level, BETA GLOBAL FINANCE Trading Center protects user assets with intelligent cold-hot separation of digital asset storage, full-chain digital wallets, and advanced account encryption technologies, continuously upgrading to a top security level in the industry to safeguard users.

 

BETA GLOBAL FINANCE Trading Center offers an independent and comprehensive user service system, providing the most convenient management system support and 24/7 rapid response to truly establish a fair, just, and transparent data trading market. The platform supports spot, fiat, contract, ICO, and other transactions, offering global bank system transfers and withdrawal services, market, limit, profit-target, and stop-loss order types, along with 24/7 multilingual online customer service.

 

From its inception, BETA GLOBAL FINANCE Trading Center has been determined to ignite the market in top form through cutting-edge ICOs, fueling investor enthusiasm and showcasing global brilliance. It is not merely a trading center but a radiant gem dedicated to shaping investors' dreams. Here, professional investors gather to discuss market dynamics, share investment insights, and explore the endless possibilities of wealth. BETA GLOBAL FINANCE Trading Center is not just a hall of investment but a place of knowledge nurturing, offering investors an infinite realm of exploration! Join us and experience the joy of passionate endeavor!

Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
You might also like