Here’s my personal redux on the carnage in the Banking sector Thur/Fri for anyone wondering:

- Banks are sitting on a LOT of low-yielding bonds & treasuries which currently trade at huge unrealized losses unless held to maturity.

- These losses aren’t a problem UNLESS they’re forced to sell these assets to cover deposit withdrawals. Fears of a bank-run didn’t substantially exist Thursday morning…but became very real by Friday afternoon w/ the Silicon Valley Bank news.

- With regard to SVB specifically, there is significant damage about to occur to the Tech Sector, and here’s a great quote from Wall Street Journal on Friday that sums it up:

“Garry Tan, president of the startup incubator Y Combinator, posted this internal message to founders in the program: “We have no specific knowledge of what’s happening at SVB. But anytime you hear problems of solvency in any bank, and it can be deemed credible, you should take it seriously and prioritize the interests of your startup by not exposing yourself to more than $250K of exposure there. As always, your startup dies when you run out of money for whatever reason.””

- Lastly, stablecoins like USDC & DAI that suffered collateral loss via SVB will likely try to simply borrow to shore up their reserves, which is difficult enough…but will meet overwhelming resistance, imo, with every uptick as holders are incentivized to cut their losses asap. Nobody claims ‘diamond hands’ for a utility coin.

Hope this helps!