Silicon Valley Bank, a leading financial institution that mainly serves tech startups, has been closed amid the ongoing banking sector crisis. The bank’s closure has sent shockwaves throughout the industry, with many investors and entrepreneurs now scrambling to find alternative banking options. Silicon Valley Bank’s shutdown is yet another sign of the growing problems facing the banking sector, which has been hit hard by the economic fallout from the COVID-19 pandemic. As companies struggle to stay afloat, many banks are finding themselves overwhelmed with bad debt, leading to closures and consolidations. This latest development serves as a stark reminder of the need for sound financial management in the tech industry and beyond.
Silicon Valley Bank is currently experiencing a financial crisis due to Federal Reserve Chairman Jerome Powell’s macroeconomic views and tightening policies to control inflation rates. With over 40 years in the market, the bank has seen its shares falling more than 60% since Thursday, leading regulators to close it down. The bank launched a $1.75 billion securities sale to raise capital and try to recover its earlier losses. However, investors are concerned about the adequacy of the capital raised to cover the bank’s losses. The crisis has also affected major U.S. and European banks, along with the crypto industry. The crypto market capitalization has also been affected, dropping from $1 trillion to $897 billion. The crisis affects not only the banking sector but also the global crypto market capitalization and the price action of digital assets.