Silicon Valley Bank Collapses, USDC De-pegs, and Wills | 2.44
Silicon Valley Bank Collapses, USDC De-pegs, and Wills | 2.44
"The hardest choices require the strongest wills." - Thanos
News and Numbers
Markets this Week:
S&P 500 is down 5%
NASDAQ 100 is down 4%
Bitcoin-USD is down 8%
Ethereum-USD is down 8%
Headlines from this Week:
Xi Jinping is officially appointed to 3rd term as president of China after winning vote 2,952 to 0 (unanimous decision).
Silicon Valley Bank (SVB) collapses as California regulators take control.
Microsoft Germany’s CTO announces GPT4 will be released this week, which is said to be 500x more powerful than GPT3.
FBI Director Says Covid Pandemic Likely Caused by Chinese Lab Leak (WSJ).
Salesforce announced their AI competitor, Einstein GPT.
Amazon rumoured to launch NFT marketplace next month (Yahoo)
Finance
By Vlad
USDC lost its value! And this is a once-in-a-lifetime opportunity (if you’re smart).
Stablecoins are cryptocurrencies designed to maintain a stable value, usually pegged to a fiat currency like the US dollar. They are commonly used as a way for traders to move funds quickly between different crypto exchanges, without the volatility risks associated with other cryptocurrencies.
However, in recent years, stablecoins have also become an important factor in the overall crypto market. When stablecoins depeg, it can cause panic and uncertainty, which may initially seem like a negative development. However, in reality, it can actually be a good sign for the rest of the crypto market.
On Friday, for the first time ever, USDC (the most trusted USD-pegged stablecoin) lost its peg. It traded as low as 89 cents on the dollar. This happened because roughly 10% of its assets were held inside Silicon Valley Bank, uninsured by the FDIC. Until there is a proper takeover of the bank, or a receivership that leads to some deposits being returned to clients, the true value of USDC moving forward is unclear.
When stablecoins depeg, it can create a sense of panic in the market. Traders may worry that other cryptocurrencies will also experience sudden drops in value, leading to a sell-off. However, this panic can actually be a good thing in the long run.
One reason for this is that it can reveal weaknesses in the stablecoin system. If a stablecoin suddenly depegs, it may be a sign that the underlying technology or mechanisms used to maintain its stability are flawed. This can lead to improvements in the stablecoin system, making it more reliable in the future. In this case, it is likely to lead to more trust towards decentralized cryptocurrencies, such as Ether and Bitcoin.
Another reason why panic caused by depegging can be positive is that it can create buying opportunities for savvy traders. When a stablecoin depegs, its value may fall relative to other cryptocurrencies, creating a temporary price discrepancy. Traders who recognize this can buy the undervalued cryptocurrency, knowing that its value will likely bounce back once stability is restored.
In conclusion, while the depegging of stablecoins can initially cause panic and uncertainty in the crypto market, it can actually be a positive development in the long run. By revealing weaknesses in the stablecoin system, creating buying opportunities for traders, and driving the adoption of other cryptocurrencies, it can ultimately lead to a stronger and more resilient crypto market.
This is not financial advice and you should always do your own research before investing in any securities or cryptocurrencies. The trading strategies mentioned above are only my opinion. I am not a public equities analyst, and you're following these tips at your own risk.
Sci-Tech
By Keyann Al-Kheder, Software Engineer
Silicon Valley Bank Collapsed
Silicon Valley Bank (SVB), a major player in the tech and venture capital community, has been closed and its deposits taken over by financial regulators, marking the largest US bank failure since the global financial crisis over a decade ago, and the second largest in US history.
The company’s downward spiral began late Wednesday, when it surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet. The federal government then took over the bank after a surprise filing on Wednesday night revealed that it had sold $21 billion in assets and was unloading stock to raise money.
The FDIC has created the Deposit Insurance National Bank of Santa Clara to hold the insured deposits from SVB, with insured depositors having access to their deposits by Monday morning. The FDIC's standard insurance covers up to $250,000 per depositor per bank, with uninsured depositors receiving receivership certificates for their balances. The closure of SVB will impact not only deposits, but also credit facilities and other forms of financing.
Many big startups like Roku, Roblox, Circle (which Vlad covered above), and others had accounts in SVB. The fallout of SVB’s collapse has raised many concerns regarding its exposure to individuals, businesses, and the economy, such as whether startups will have issues making payroll, and whether it represents the Lehman Brothers domino of the 2008 crisis. However it’s worth noting that SVB only had $200 billion in total assets, and although that’s a sizeable amount, it’s only about 5% the size of a big bank like JP Morgan, which has over $3.6 trillion in total assets.
Paradigm Shift
Wills
By Roman Kuittinen-Dhaoui, BBA (Hons.), CPHR Candidate
Below are 3 reasons to have a will.
Control over your assets: Having a will allows you to determine who gets your property and assets after you pass away. Without a will, your assets will be distributed according to the laws of your state, which may not align with your wishes.
Protecting your loved ones: A will can provide for the care of your dependents after you pass away. You can name guardians for your minor children, designate a caretaker for any pets you may have, and allocate funds for their care.
Avoiding legal disputes: A properly drafted will can help avoid disputes among family members or other heirs over your assets. This can reduce the likelihood of costly and time-consuming legal battles that can harm relationships and deplete your estate.
While there may be some unique circumstances where it may make sense for an individual not to have a will, it is generally advisable to have a will in place to ensure that your assets are distributed according to your wishes after your passing.
With that said, here are 3 reasons someone might consider not having a will:
Limited assets: If you have very few assets or if all of your assets are jointly held with a spouse or other individual and you are content with them receiving all of your assets after your passing, you may not feel the need to create a will.
Simple distribution wishes: If your wishes for distributing your assets are straightforward and can be accomplished through beneficiary designations, such as naming beneficiaries on retirement accounts, life insurance policies, and bank accounts, you may not feel the need to create a will.
Desire for state default laws: If you do not create a will, your assets will be distributed according to the laws of your state, which may align with your wishes. However, keep in mind that these laws may not be in line with your specific wishes and could result in unintended consequences.
TLDR: Do your loved ones have an updated will? Do you have a will?
(Head)Space
By Keyann
Easier said than done.
Lately, my headspace has revolved around a few consistent themes, and I think they all relate.
Luck & Success
Do more by taking on less
Understand the sacrifice
In my ‘success journey’, I like to think I had a very thorough evolution, from motivational videos on youtube to working out, reading, meditating, self-discovery, learning to code, blogging, and finally joining a startup as a Software Engineer.
But I’ve reached somewhat of a ceiling now - a ceiling that is exponentially harder to challenge.
I always thought that if you set goals and persist with them long enough, you’ll eventually succeed, but I really underestimated the challenge. I knew nothing worth doing would be easy, and I knew about optimism bias (the tendency to overestimate our likelihood of positive outcomes), but I still underestimated my odds of success and odds of failure.
At the very least, the closer I get to it, the further I realize it is. Take Mixed-Martial Arts for example. You can be one of the top 10 fighters in the UFC, but you still won’t be Khabib or Jon Jones. The gap from the 10 best fighters to the top 3 like Khabib, is as far of a gap as the 100th best fighter to the 10th.
I’m at a point in my life where I’ve tried a lot of things and have seen and experienced much more failures and partial successes than full-blown successes. I studied computer science but I spent a lot my free time fiddling with projects. I started with some e-commerce, then sold music beats, did some freelance web development, then started weeklyedible, then created my own an app that got me an email from Y-Combinator, and ultimately decided to focus primarily on the startup I’m at currently.
I'm not saying I’ve failed or am giving up, but it’s as if I’ve gotten as far as I can within my control, and from here there is still a high chance things don’t work out. Most motivational entrepreneur content will make you believe generating a 6 figure is simple, and that anything is within your control, but the reality is so much more challenging and complicated.
So what are my takeaways from all my years of blind ambition?
Here’s what I’ve learned, and what I’d do differently if I had to:
Progressing a lot at anything is hard and takes time, but you will progress at anything you spend time doing. Consider what you want to get good at in addition to what you think you can get good at.
The most common ‘successes’ are not made overnight or even over a year, but usually over a period of 10 years. Extreme successes require even more time and some luck. Whatever you decide to pursue, whether it be art, business, or engineering, estimate a 10-year period so that you don’t get impatient
Even if you sacrifice everything to be successful, there’s still no guarantee you’ll reach the stars. Being the best at something means spending every day on it, which ultimately requires sacrificing time spent on other experiences. Learn to enjoy the ride or you’ll never be happy.
No matter what you pursue, whether that’s selling art, music, clothes, or software as a service, you have to spend a lot time learning and improving to succeed. It’s hard to wake up every day and do the same thing day in and day out for 10 years, unless can enjoy the ride. If that pursuit gets you up excited to wake up and happily dedicate hours to it, then following your passion isn’t that overrated.
It’s easy to spread yourself thin, but it’s also easy to chase a lost cause. If I had to redo it, I’d focus on one demonstrable goal or milestone, one pursuit at a time, before quitting or pivoting to something else. This way, you can really get the most out of the time spent in your pursuit, and if you don’t make it big, then you can at least still look back at some accomplishments or achievements. For example, if you’re learning code, make an app, or, better yet, win a hackathon. If you’re making music, finish an album, or play a gig.
Even all this though, is easier said than understood. It’s hard to predict our emotions 5 years from now. It’s hard to know whether you’ll be happier in some 9-5 knowing you can afford rent, or struggling to sustain your ‘passion’ as work. Ultimately, I think you have to accept that you can’t predict all the outcomes or compare your life with different timelines of what you could have done. Whatever you do pursue, understand what you’re getting into as much as you can and commit.
Company of the Week
A startup founded by ex-Apple design and engineering team Imran Chaudhri and Bethany Bongiorno, Humane, today raised another $100 million to build what it calls an “integrated device and cloud services platform” for AI.
Humane’s work is shrouded in mystery. But its latest round of funding, a Series C, attracted a laundry list of notable investors, including Kindred Ventures (which led the round), SK Networks, LG Technology Ventures, Microsoft, Volvo Cars Tech Fund, Tiger Global, Qualcomm Ventures and OpenAI CEO and co-founder Sam Altman.
To date, Humane has raised $230 million from existing and previous investors, including Salesforce CEO Marc Benioff. Its workforce has grown correspondingly larger, now numbering exactly 200 employees.
the Employer in exchange for higher wages to the unionized employees.
Written by: Vlad Estoup, Keyann Al-Kheder, and Roman Kuittinen-Dhaoui