The First Citizens Bank's acquisition of Silicon Valley Bank - Is it a good news for crypto?

By its agreement to acquire Silicon Valley Bank, First Citizens BancShares, the parent organization of First Citizens Bank, has accomplished a significant development in the banking industry (SVB).

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According to Trade Algo, the Federal Deposit Insurance Corporation (FDIC) confirmed the agreement in a statement on Monday.

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What effect will First Citizens BancShares' acquisition of SVB impact the future of the crypto sector given that several important crypto startups relied on it before its demise?

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First Citizens' Purchase Of SVB: Specifics

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The FDIC recently took control of SVB after a run on the bank's deposits caused it to become insolvent. First Citizens BancShares has agreed to pay Silicon Valley Bank a reduced price of $16.5 billion for about $72 billion in assets, as part of the agreement.

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The FDIC will continue to be in charge of the bank's assets, which total around $90 billion in stocks and other assets.

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Moreover, First Citizens BancShares will grant the FDIC equity appreciation rights that may be valued up to $500 million. The seventeen former Silicon Valley Bank locations will now be run by First Citizens Bank.

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According to estimates, the Deposit Insurance Fund is anticipated to lose almost $20 billion as a result of Silicon Valley Bank's bankruptcy.

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The Implications For Crypto

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Concerns have been raised concerning how First Citizens BancShares' acquisition of SVB may affect the cryptocurrency market.

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SVB has been instrumental in helping some of the biggest cryptocurrency businesses in the world, like Circle Financial, access banking services.

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The value of Circle's USDC stablecoin briefly fell below its $1 peg when the company revealed that SVB was holding $3.3 billion of its deposits.

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The acquisition raises concerns regarding if the bank will maintain its crypto services and, if so, how they might change under new management.

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Despite First Citizens BancShares' silence on the subject, industry insiders predict that the acquisition will impact how the bank approaches working with the cryptocurrency sector.

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The acquisition announcement also comes as politicians and regulators aim to impose stronger laws and restrictions on the cryptocurrency business, which is under increased scrutiny. Many analysts think that traditional financial institutions, including banks, need to get involved if cryptocurrencies are to flourish and become widely used.

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A consolidation of the cryptocurrency business is possible, according to some analysts, as conventional banks aim to establish themselves in the market as a result of the move.

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How the acquisition of SVB will affect the development of the cryptocurrency market is yet to be determined. Yet, it is obvious that the action has prompted worries about the provision of financial services to cryptocurrency businesses in the future and how the sector will develop in the face of escalating regulation and competition.