Silicon Valley Bank’s shares have tanked, causing panic in the financial sector to spread from Wall Street to Europe and Asia. This comes after the lender announced it would sell shares at a loss in order to cover rapidly declining customer deposits.
Silicon Valley Bank (SVB) Financial Group, a bank which lends primarily to tech companies, told investors on Mar. 9 that it was forced to sell almost $2 billions in shares to raise additional capital to help offset bond sale losses.
The news quickly triggered massive losses across the banking sector and raised concerns that the Federal Reserve’s interest-rate hikes were preventing banks from raising capital.
Before last year, when interest rates were near zero, large banks were buying up U.S. Treasurys and bonds, but the rise in the federal fund rate has since weakened their value, while banks sit on increasing losses.
Since banks tend to hold large portfolios of bonds, their decline is normally not a problem unless they are forced to sell them.
U.S. government bonds surged after the California lender sold off shares to cover bond losses, leading to more worries over the banking sector’s debt holdings.
Bank Stock Values Plunge Across the Board
The news from the tech industry lender quickly caused a knock-on effect on Thursday, as banking stocks fell at their fastest pace since the first months of the pandemic, taking Wall Street’s major indexes down with them.
SVB shares tumbled more than 60 percent and lost another 20 percent in after-hours trading, in the worst decline in the sector, after CEO Greg Becker admitted the bank could be dealing with problems for the foreseeable future.
Meanwhile, America’s four largest banks lost more than $50 billion in market value at the end of trading on Mar. 9.
Shares of JPMorgan Chase fell 5.4 percent, while Bank of America took a 6.2 percent hit, Wells Fargo was down 6.2 percent, and Citigroup tumbled 4.1 percent.
Bank stocks in Europe and Asia sold off sharply the following day, as news surrounding SVB Financial spread to markets across the world.
The Euro Stoxx Banks Index witnessed its worst day since June 2022, led by Deutsche Bank, which saw an 8 percent loss, followed by Société Générale, HSBC, ING Groep, and Commerzbank, which all fell more than 5 percent.
“Lots of chatter today about the possibility of generalized U.S. banking system stress due to SVB troubles. Three summary things on this: While the U.S. banking system as a whole is solid, and it is, that does not mean that every bank is,” stated economist Mohamed A. El-Erian in a tweet.
“Due to the volatility in yields after the prior protracted period of leverage-enabling policy, the most vulnerable currently are those vulnerable to both interest rate and credit risk. Contagion risk and the systemic threat can be easily contained by careful balance sheet management and avoiding more policy mistakes,” he continued.
Meanwhile, U.S. and European bond yields fell to their lowest level in weeks, after investors bet that turmoil in the bank sector could reduce the ability of the Fed to keep hiking interest rates.
Silicon Valley Lender’s Bonds Lose Value to Rising Interest Rates
The interest-rate hikes over the past year have also caused value of its bonds to fall, particularly those that took many years to mature, forcing the bank to reinvest the proceeds from its sales into shorter-term assets.
SVB has suffered significant losses on its portfolio, which was heavily invested in U.S. Treasurys and mortgage-backed securities, which have all taken a beating.
The 40-year-old bank was forced into a fire sale of its securities on Thursday, dumping $21 billion worth of holdings at a $1.75 billion loss while raising $500 million from venture firm General Atlantic, according to a financial mid-quarter report on Mar. 8.
SVB additionally reported more than $90 billion in held-to-maturity securities.
Its recent losses have caused American startup firms, particularly venture-backed tech and life sciences companies, to feel the pinch, as the bank caters heavily to these new firms.
Higher interest rates, fears of a recession, and a tepid market for initial public offerings have made it harder for new startups to raise additional capital in the past year.
The lender’s 2022 third quarter report stated it was partnered with nearly half of all venture-backed tech and health care companies based in the United States.
“The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered,” warned Pershing Square CEO Bill Ackman in a tweet.
“After what the Feds did to @jpmorgan after it bailed out Bear Stearns, I don’t see another bank stepping in to help @SVB_Financial,” he added.
Investors were worried ahead of today’s employment report from the Department of Labor, which they hope will provide some hint on the Fed’s next policy moves.
SVB Reassures Investors That Things Are Fine
The collapse of SVB’s stock value comes shortly after a key lender for the cryptocurrency industry, Silvergate Capital, announced liquidation plans on Mar. 8, following the implosion of FTX, which used the bank to transfer customer funds.
However, the bank said in its letter to investors that it had minimal exposure to crypto, but analysts are still concerned that not all is well at SVB.
Becker reassured investors that their assets were safe and that the stock sale was only an attempt to increase financial flexibility, strength, and profitability at the bank, but the current market situation has caused pressure to its “balance of fund flows.”
The bank cited higher interest rates and “elevated cash burn from our clients” at a historically elevated level and less investments from venture capital, are the primary reasons for raising new capital.
Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.”
He asked clients to “stay calm. That’s my ask. We’ve been there for 40 years, supporting you, supporting the portfolio companies, supporting venture capitalists.”
SVB’s mid-quarter update reported a low ratio of loans to deposits, at 43 percent, which leaves little protection in the wake of a share-price selloff over the coming days.
If startups panic and begin pulling funds from SVB due to concern about its financial health, this could exacerbate the mismatch in deposits and withdrawals, increasing pressure on the bank.
Still, one expert believes the problem goes deeper than just investors getting spooked by SVB and that it is more systemic.
“Why this sudden meltdown in bank stocks? Small banks face a double whammy: Less ”financial liquidity” (reserves) in the system, disproportionately affecting them, a tougher funding landscape, with plenty of safer and higher-yielding alternatives for depositors. This is the real issue, [in my honest opinion],” said Alfonso Peccatiello, founder and CEO of TheMacroCompass, in a tweet.
Article cross-posted from our premium news partners at The Epoch Times.
Why Bullion Beats Numismatics and Collectible for Your Safe or IRA
Precious metals continue to attract Americans seeking reliable ways to protect their wealth amid inflation, geopolitical risks, and stock market swings. Whether stored in a home safe or held inside a self-directed IRA, physical gold and silver deliver tangible value that paper or digital assets often lack. Yet investors must choose carefully between bullion—pure bars and coins valued mainly for their metal content—and numismatics or collectibles, where rarity, history, and collector demand heavily influence pricing.
Advisor Bullion serves as a dependable source for straightforward, high-quality bullion. The company specializes in physical gold, silver, platinum, and palladium, emphasizing transparent pricing and products that deliver maximum metal content for every dollar spent. This approach makes it ideal for both personal holdings and retirement accounts.
Bullion consists of refined precious metals in standard forms like one-ounce coins (American Gold Eagles, Silver Eagles, Canadian Maple Leafs) or bars. Their value tracks closely to the current spot price of the metal. A typical gold bullion coin trades near the live gold spot price plus a small premium. This structure keeps costs clear and predictable.
Numismatic coins and collectibles add substantial value from factors such as age, rarity, minting errors, or historical significance. A pre-1933 U.S. gold coin or graded proof piece can carry premiums of 30%, 50%, or even 200% above melt value. While this appeals to hobbyists, it creates complexity. Pricing depends on subjective grading, collector trends, and auction results instead of daily spot prices.
For investors focused on wealth preservation and retirement security rather than building a collection, bullion often delivers better results.
Lower Costs and Better Liquidity for Home Storage
When keeping metals in a home safe or private vault, liquidity and efficiency count. Bullion offers clear benefits:
- You acquire more actual gold or silver per dollar invested. Numismatics divert a large share of your money into rarity premiums and massive sales commission, reducing your metal exposure.
- Selling bullion involves tight bid-ask spreads, so you recover nearly full spot value with minimal fees. Collectibles require finding the right buyer and may sell at a discount if demand for that specific item weakens.
- Bullion prices remain transparent and update with global spot markets. You can track gold near current levels or silver accordingly and know exactly where your holdings stand. Numismatic values are priced by the Gold IRA companies with hefty margins applied.
- Standardized coins and bars store efficiently and divide easily for partial sales. Rare coins often need protective slabs and controlled conditions, adding hassle and expense.
- Bullion enjoys worldwide acceptance. A 1-oz Gold Maple Leaf or Silver Eagle sells quickly to dealers anywhere. Niche numismatic pieces may appeal only to limited buyers, slowing liquidation when speed matters.
In times when quick access to value becomes important, bullion’s simplicity stands out.
Stronger Fit for Precious Metals IRAs
Precious metals IRAs continue gaining traction as investors diversify retirement portfolios beyond stocks and bonds. IRS rules permit certain bullion products in self-directed IRAs if they meet purity standards (.995 fine for gold, .999 for silver) and are held by an approved custodian. Eligible items include American Gold and Silver Eagles plus many generic bars and rounds from recognized mints.
Numismatic and most collectible coins generally face heavy scrutiny from custodians due to valuation disputes and elevated markups. These higher premiums mean less actual metal ends up working inside the account.
Bullion avoids these issues. Its value links directly to verifiable spot prices, which simplifies reporting and lowers the risk of regulatory challenges. More of your IRA contribution purchases real metal instead of dealer profits or speculative upside. Over time, owning additional ounces that appreciate with the metal itself can create meaningful outperformance compared with high-premium alternatives that deliver fewer ounces.
Regulatory guidance from the CFTC and state securities offices repeatedly cautions against aggressive sales of expensive numismatics or “semi-numismatic” coins for IRAs. For retirement planning, transparent bullion from established providers reduces risk and aligns better with long-term goals.
How to Get Started with Bullion
Begin by clarifying your goals. Are you protecting savings in a safe, or moving part of a retirement account into a precious metals IRA? Focus on the number of ounces you can acquire at current prices rather than chasing marked-up collectibles.
Diversify sensibly: use gold for core preservation and silver for its blend of industrial and monetary qualities. Mix coins for easier divisibility with bars for lower per-ounce costs on larger buys. Arrange secure storage—whether at home with proper insurance or through professional facilities.
As economic uncertainties linger and faith in conventional assets erodes, bullion continues proving its worth as a dependable store of value. Its direct approach avoids the hype that sometimes surrounds collectible markets and keeps the focus on the metal itself.
For investors prepared to strengthen their portfolios, Advisor Bullion supplies the expertise and selection needed to acquire high-quality bullion efficiently. Whether building personal holdings or integrating metals into an IRA, their emphasis on transparent, investment-grade products helps secure more ounces today that support greater financial security tomorrow. In a complicated financial landscape, bullion’s clarity and reliability make it the smarter foundation for protecting what matters most.