Crypto acted as safe haven amid SVB and Signature bank run: Cathie Wood

Amid each the chaos astir aggregate slope runs successful the United States, Cathie Wood, CEO of plus absorption steadfast Ark Invest, said cryptocurrencies acted arsenic harmless haven amid the ongoing banking situation successful the US. She blamed the caller downfall of the likes of Silicon Valley Bank (SVB), Signature and others connected the Fed’s argumentation failure. 

Cryptocurrency prices changeable up successful treble digits, with Bitcoin (BTC) and Ether (ETH) touching caller multi-month highs amid the US banking crisis.

In a Tweet thread connected March 16, Wood criticized the Federal Reserve’s inability to avert slope runs contempt each the signs being there. She said she was “baffled that banks and regulators could not person the Fed that catastrophe loomed.” She argued that the Fed argumentation was the superior culprit for the ongoing banking situation since determination was a task superior backing drought.

Crypto did not unit SVB and Signature into bankruptcy. In my view, Fed argumentation was the superior culprit. Because of a VC backing drought and higher yields connected wealth marketplace funds, deposits near the US banking system.

Pointing towards the asset/liability mismatch, which, adjacent mean successful astir circumstances for banks, was untenable successful the existent script arsenic deposits near the banking strategy for the archetypal clip since the 1930s. Securities net for banks were lone 1-2% against deposits paying 3-5%, which yet became untenable arsenic deposits started leaving the system. Like SVB, immoderate banks were forced to merchantability HTM securities, recognizing losses that depleted their equity accounts.

She besides reminded everyone that the ongoing situation wasn’t forced by the cryptocurrency arsenic the ecosystem has been nether dense scrutiny since FTX's downfall starring to a terrible regulatory crackdown. Wood said that regulators are utilizing crypto arsenic a scapegoat for their ain lapses successful oversight of accepted banking.

If you are correct, Congressman, past the FDIC and others volition forestall the US from participating successful the astir important signifier of the net revolution. Like you, I judge regulators are utilizing crypto arsenic a scapegoat for their ain lapses successful oversight of accepted banking. https://t.co/UDh3bwB2pB

Wood has agelong been a known crypto proponent, often reflected successful her company’s concern successful emerging markets, particularly crypto. She noted that the existent banking situation would not person been imaginable successful the decentralized, transparent, auditable, and over-collateralized crypto plus ecosystem.

Related: US recognition crunch means it’s clip to bargain golden and Bitcoin: Novogratz

Wood projected crypto arsenic a solution to the cardinal points of failure, the opacity, and the regulatory mistakes successful the accepted fiscal system. Made the scapegoat for argumentation mistakes, crypto volition determination offshore, depriving the US of 1 of the astir important innovations successful history