During the chaos on Friday, David Z. Morris, CoinDesk’s chief columnist, tweeted that 'I don’t know what to say about venture-funded web and delivery startups having the exact same arc as crypto over the past three years. But that is what has happened. Down to their respective banks collapsing in the same week.' Well I do.
people have been breathing a sigh of relief that the government only bailed out depositors (who, it is assumed, are deserving victims at risk of losing their hard-earned payroll money), not SVB shareholders (who, it is assumed, are SVB executives and VC/finance ghouls); this is pretty silly, given that almost none of the VCs tweeting up a storm were ever asking for a shareholder bailout. in fact, almost all of SVB's shares are owned by institutional investors. some of these, to be sure, are asset managers for rich people, but yahoo also lists Vanguard, JPMorgan Chase, Morgan Stanley, Franklin, and Fidelity as big losers, so a lot of the losses are going to accrue to random people with 401(k)s who were never aware that they owned any SVB stock.
people have also been breathing a sigh of relief that the bailout wasn't structured like the 2008 bailout, and lmao: it's actually worse. in 2008, the government bought troubled assets off the banks, in exchange for the banks issuing the government the right to acquire shares of them. after the dust settled and "the financial crisis" """ended""", the government ended up spending $426 billion to acquire assets that it was eventually able to sell for $441 billion, costing the public -$15 billion. this bailout, in contrast, is taking the form of the FDIC acquiring SVB, selling off what it can, and then assessing other FDIC-insured banks extra deposit insurance premiums to make up for any money it can't recover that way -- so it's likely going to cost the government more, and the costs will likely be passed through by banks to random depositors, rather than being paid by stock traders on the losing end of trades.
this was 100% a bailout for venture capitalists and the only ways it appears not to be are pure marketing.
