The recent news about Silicon Valley Bank’s failure has sent shockwaves throughout the financial industry. As the country’s 16th largest bank, SVB’s collapse has the potential to cause significant damage to the global economy. The federal government has taken control of the bank, and all trading of its stock has been halted after plummeting more than 80% since Thursday. The CEO and other insiders at SVB sold over $3 million worth of stock in the last two weeks, which has raised questions about the bank’s stability.
The top four banks have lost more than $55 billion in market value in a single day as a result of SVB’s collapse. More than 95% of all the accounts at SVB are NOT FDIC insured, meaning that customers’ deposits are at risk. Furthermore, nearly half of all US venture capital-backed startups were involved with SVB. Blockfi has $227 million, ROKU has 26% of all their cash and cash equivalents, and Circle of USDC has $3.3 billion, all of which are NOT INSURED with SVB. This puts these companies and their investors at significant risk.
This event will have major ramifications on the global economy, and stocks are expected to bleed for weeks to come. Investors will likely rush to pull their money from banks, and there may be further bank failures. The upcoming week is going to be insane when banks and stocks reopen. This coming recession will impact everyone, and it’s essential to understand what’s happening in thee economy and how to react.
It has never been more important to invest in your financial education to prepare for such global events. The uneducated and unprepared people are going to get wrecked in this coming recession. Therefore, it’s essential to start investing in your financial education before it’s too late. PubCo Insight provides a great resource to learn more about how to prepare for the coming recession. Don’t wait until it’s too late; start investing in your financial education now! Join us for articles, tips and great insights into what’s happening in the financial markets and easy terms that anyone can follow.