The Weekly Pen: Week11 - Special Edition

Week 11, wrapping up with the Pen team in this special edition of the Weekly Pen. An aggregation of all things as usual, with an overview of what it means and our “personal” take on the week that went. Because dear oh dear, was there much to figure out and fathom. The most trending all, the collapse of SVB and the contagion-like effect on all aspects of the market, but also some unprecedented turn of events, and light through darkness, spurring a sense of hope for the future of global markets and the need for a financial market which goes beyond TradFi which merges with technology and innovation-driven CeDeFi, and taking our 2022 year-end prediction into play (see week52 2022). Ladies, Gentlemen & People, The Pen team wishes you a good read and Sunday.

GLOBAL ECONOMY#

• Biden to talk about steps taken to protect the banking system.
• UK economy has gone from best to worst.
• FED to consider tougher rules for banks after fear and collapse.
• ECB raises the rates again.
• US mortgage market suffers fallout from bank failures.
• Fed considers toughest rules for midsized banks after SVB’s collapse.
• FDIC transfers all deposits of Silicon Valley bank to the newly created bridge bank.

GEOPOLITICS#

• Russia is completely cut off from the international financial system.
• House GOP digs in on china-linked payments to Biden family members.
• US lawmaker accuses FDIC of using banking instability to attack crypto.
• Biden says Americans can have confidence that the banking system is safe.
• Euro Parliament approves Data Act on smart contracts.

CRYPTO#

• Crypto markets surge as investors predict fed pause.
• Silvergate, signature collapse leaves crypto with few bank partners.
• Coinbase had $ 240 million deposited at the signature bank.
• Crypto wallet prototype discovered inside Microsoft Edge browser.
• Bitcoin to reach $ 1 million in the next 90 days.
• Fidelity's crypto launch could benefit from banking turmoil.
• Fidelity digital assets expand fidelity crypto to the public.
• Sam Bankman-Fried transferred $ 2.2 billion to his personal account.
• Crypto exchange OKCoin pauses USD deposits.
• Regulators close crypto-focused signature bank.

PAYMENTS#

• Stripe raises $6.5 billion at nearly half its peak valuation.
• Circle has been “able to access” its $3.3bn held with silicon valley bank.
• Swiss Bankers Association proposes deposit tokens.
• Natwest bank puts a $6k monthly limit on crypto exchange payments.
• European parliament votes to form final law on EU digital wallet.
• National Australia Bank makes first-ever cross-border stablecoin transaction.
• Stripe’s building the payments foundation for tomorrow’s AI economy.

BANKING#

• HSBC pays £1 to rescue the UK arm of Silicon Valley bank.
• First republic bank is in trouble.
• KPMG provided the audit of Silicon Valley Bank and Signature Bank.
• Banking challenges grow for Hong Kong’s crypto firms despite the city’s push to become a hub.
• JPMorgan, Citi, and HSBC still welcome crypto clients.
• Silicon Valley Bank’s parent company files for chapter 11 bankruptcy protection.
• PE firms Apollo and KKR are among those reviewing Silicon Valley Bank loans.
• Credit Suisse to borrow up to nearly $ 54 billion from Swiss National Bank.
• Silicon Valley Bank execs enjoyed generous compensation in recent years.
• Swiss National Bank says it will support credit Suisse.

FINANCIAL MARKETS#

• Asian Bank stocks sink.
• First republic shares fall as investors weigh dividend cut and $30bn aid.
• Elon musk reacts to Cathie Wood's bold tweet.
• SVB says Goldman Sachs was the buyer of the portfolio it booked losses on.
• SVB execs sold $ 84 million in stock over the past 2 years, stoking outrage over insider trading plans.
• Blockchain.com shuts down its asset management division.
• First Republic Bank shares crash.
• First republic bank executives sold $12 million in stock in months before the crash.

INVESTMENTS#

• Investors have wiped 13%, from the six largest WS banks.
• Since 08' crisis, American Banks have never been cheaper.
• People are pouring cash into market funds at the highest rate.
• Peter Thiel had $50 million in silicon valley bank when it went under.
• Robinhood users say the trading app won’t cash in their profitable bets against Silicon Valley bank.
• Buffets company has seen close to $ 7 billion erased from its Bank of America and amex stakes.

DEFI#

• Silicon Valley bank collapse had little impact on the price of top NFT art collections.
• BlackRock CEO touts tokenization, warns US ‘lagging’ in innovation.
• Maker DAO passes a proposal to increase its portfolio holdings of US treasury bonds by 150%.
• Meta pulls the plug on NFTs on Instagram and Facebook.
• The Arbitrum Foundation will drop a new token and form a Dao.

WHAT IT ALL MIGHT MEAN#

• There’s a massive shift of powers in the making.
• The U.S. banking world feels both the potential and threat to the established financial markets caused by the world of democratized finance.
• CBDCs is back on the agenda, to be enforced to the general public.
• The fall of the U.S. Banking system might be a coerced strategy to gain the broader public’s trust.
• The giants of the banking and financial world see massive opportunities in the space of DeFi and crypto.
• The giants might be “washing” out the mainstream players to gain greater control over the digital asset markets once the market settles and gets ready for the next +decade of bull run.
• Interest rates might keep rising to cool markets off, creating a washout of sectors driven by irrational exuberance.
• Once the market settles, tighter regulation will cause higher barriers to entry for smaller market players.
• Investor trust has been broken and will need restoration by transparent and open-trust (wink) investment and financial service providers.
• Europe will see a surge of a crypto boom as it will be the upcoming region to take over the market to become the crypto hub, as the US crackdown and Asian investor flees open such doors.
• Crypto appears to gain momentum and more mainstream acceptance, not only reflected by price surges but from established TradFi players pushing for wider offerings.
• There will be a shortage of silver paper or tinfoil depending on UK or US English terms, as many hats will be created and worn by the public trying to make sense of it all.

- Till we yield again

*Disclaimer: This article is not financial or investment advice, nor should it be perceived as such. Penning Group and the author shall not be held accountable for any misinterpreted information by the reader. If you are interested in learning more about investing in the DeFi space and in general, please get in touch with us.

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