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Crypto acted as safe haven amid SVB and Signature bank run: Cathie Wood

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Amid all the chaos around multiple bank runs in the United States, Cathie Wood, CEO of asset management firm Ark Invest, said cryptocurrencies acted as safe haven amid the ongoing banking crisis in the US.

She blamed the recent downfall of the likes of Silicon Valley Bank (SVB), Signature and others on the Fed’s policy failure. Cryptocurrency prices shot up in double digits, with Bitcoin (BTC) and Ether (ETH) touching new multi-month highs amid the US banking crisis.In a Tweet thread on March 16, Wood criticized the Federal Reserve’s inability to avert bank runs despite all the signs being there.

She said she was “baffled that banks and regulators could not convince the Fed that disaster loomed.” She argued that the Fed policy was the primary culprit for the ongoing banking crisis since there was a venture capital funding drought.

Crypto did not force SVB and Signature into bankruptcy. In my view, Fed policy was the primary culprit. Because of a VC funding drought and higher yields on money market funds, deposits left the US banking system.Pointing towards the asset/liability mismatch, which, even normal in most circumstances for banks, was untenable in the current scenario as deposits left the banking system for the first time since the 1930s.

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