Hacker News Reader

Comment by wbl | Hacker News Reader

Let's be real clear.

The crypto bros and VCs killed not one but two banks that started getting into trouble after being very accommodating by pulling out money. Now they want the rest of the financial system to keep doing business with them.

View on HN

I think your logic comes up a bit short because you are basically saying that a bank was accomodating a customer who was generally unloved and then the customer just pulled their funds out because...?

I think SVB's actual failure was triggered by their lousy balance sheet which got pinched once the fed finally brought interest rates higher. Once customers saw the consequences of this, they left.

JP Morgan put funds in when a bank was in danger. In one case the funds vanished because crypto money goes away when the market declines very quickly.

It's the banks fault for terrible investments not the customers. Any customer would withdraw their money if they knew their bank is on the brink of collapse.

Many banks have no problem taking on unnecessary risk because they believe the govt will bail them out anyway.

And before the reserve there were no banks making unnecessary risks?

maybe that means the space should be more competitive with more banks freely offering services to crypto businesses without being pressured by the government

maybe that's why most crypto companies end up being too concentrated on a handful of banks only

No bank is going to take flighty deposits from money launderers who habitually suborn financial institutions.

Could you expand on this? Sounds like an interesting story

the proximate cause for SVB collapsing was that YC partners and other VC bros took their money out of it, then told the companies they cared about to do the same.

I remember that weekend well. I was actually curious about the other bank and what crypto had to do with it.

https://en.m.wikipedia.org/wiki/Silvergate_Bank

Reply on news.ycombinator.com