Per Matt Levine, their fatal and unforgivable mistake was putting their assets in fixed, low-interest, HTM investments whose value was directly correlated to the financial health of SVB’s depositors, so the bank had to write down assets when depositors needed their money.

In hindsight, it would have been better to keep cash. Or even better to find an asset inversely correlated with interest rates, even if it would have earned less money when rates were low.

It was a lack of beta that killed them, and while there doesn’t seem to have been wrongdoing, it sure looks like a classic “failed to understand their own business” mistake.