Silicon Valley Bank Collapses, Crypto Investors Blame Traditional Financial Systems

Silicon Valley Bank collapsed. (Photo; Doc. CTV News)

JAKARTA - The latest crisis in the tech industry has not only happened to cryptocurrency companies, but also to Silicon Valley Bank which suddenly collapsed on Friday, March 10. This has sparked panic across the tech industry, including crypto executives and investors who have experienced upheaval over the past year. Crypto advocates blame the centralized financial system for causing this crisis. They fight for alternative financial systems that are not tied to major banks and other gatekeepers.

Some technology investors argue that the crypto industry, which is full of bad actors and collapse overnight, has made people panic at the first sign of the problem. This causes panic in tech companies, including the Silicon Valley Bank.

However, crypto supporters blame the structure of the traditional financial system for sowing instability. Some venture investors blame social media panic that triggered a bank burglary. Others blame the government for its economic policies, or the bank itself for poor management and poor communication.

The debate comes after a volatile year for tech companies where the crypto industry has been in crisis for months and some of the largest Silicon Valley companies have laid off mass employment.

Silicon Valley Bank went into crisis on Wednesday 8 March when it announced that it had lost nearly $2 billion and would sell assets to meet demand for withdrawing funds. This news sparked fear in the tech industry as startups rushed to withdraw their money.

When banks run, the concerns that arise become forecasts that are fulfilled on their own. For information only, banks runs when many bank customers start withdrawing their funds simultaneously due to concerns over the bank's security and stability. This can trigger bank bankruptcy and result in bigger financial problems in the banking system. Banks runs often because of rumors or uncertainty in the financial market.

On Friday, Federal Deposit Insurance Corp. announced that it had taken control of Silicon Valley Bank, marking the failure of the largest bank since the 2008 financial crisis. The insured deposits will ensure that they will get full access to their funds on Monday, March 13.

Experts say that this crisis is a warning to technology companies and governments to improve their financial systems and economic policies.

This crisis also highlights the importance of finding alternative financial solutions that can provide security and stability in the future. In conclusion, the crisis in Silicon Valley Bank demonstrates the importance of the role of alternative financial systems in providing stability to the technology industry and improving existing financial systems.