Silicon Valley Bank’s failure was the biggest story of this week, as numerous tech companies, large and small, and their investors had funds tied up in the bank, which is now under regulator control and whose parent company is officially filing for bankruptcy. Among the public companies with exposure to SVB were big names like Roku, Roblox, Quotient, Vimeo, Rocket Lab, SoFi, Life360, Sezzle, Unity, AppLovin, Wish, and many others.
Despite the SVB collapse, the subsequent failures of crypto-friendly banks, and the shortcomings of Silvergate, Apptopia reported the top crypto apps’ downloads rose over 15%. At the same time, the top 10 traditional banks and the top 10 “digital first” bank app downloads fell by about 5% and 3%, respectively. This begs the question of whether the people shouting FIRE last weekend were also those who were heavily invested in crypto and therefore would have benefited from the chaos in the banking system.
It remains unclear how exactly this situation will affect investors both short-term and long-term, but it does show a clear trend towards increased interest in cryptocurrencies despite an unstable financial environment caused largely by traditional banking systems failing or being taken over. It also shows a distrust among people when it comes to relying on centralized institutions such as banks for their finances, instead opting for decentralized solutions offered through cryptocurrency investments.
