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Silicon Valley Bank is a bank.
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It holds money for customers.
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Generally, it loses money when holding customer money, so it needs to lend out at least as much as they hold.
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Most of its customers are Startups with large amounts of deposits.
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in 2020/21, when Jay Powell kickstarted the money printer 🖨️💸, a lot of VC-money poured into Startups and, thus, into SVB.
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SVB didn't know what to do with this money, so they purchased US Treasuries.
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At that time, $100 VC-money = $100 USTs.
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Jay regretted the amount of money printing, as everything got more expensive. 😥
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He pulled money out of the system.
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$100 USTs are now worth $60.
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$100 VC money =/= $60 USTs – uh oh.
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Startups hold bazillions of $$$ at SVB, but Jay only promises them $250,000 if SVB goes bye-bye.
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Startups 🏃♂️💨 ... SVB.
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SVB ☠️.
FAQ