DappRadar, the platform that provides data especially for decentralized markets, pointed to the movement of whales after the Silicon Valley Bank (SVB) explosion. According to analytics platform, the boom of SVB has led large investors to Uniswap (UNI) and various DeFi coins. Here are the details…
The SVB collapse also affected the cryptocurrency space
According to DappRadar, the collapse of Silicon Valley Bank (SVB) last week has made decentralized finance (DeFi) transactions crazy. On Wednesday, March 8, SVB was the 16th largest bank in the United States. It served half the nation’s technology and life sciences companies, many of which were backed by venture capital firms. However, as we reported on Cryptokoin.com, on Friday afternoon, March 8, regulators declared the bank bankrupt and seized all operations.
On Wednesday morning, the SVB announced a loss of $1.8 billion. This loss was due to the large part of their customers withdrawing their money. To cover the withdrawals, the SVB had to sell some of its long-term bonds. However, due to the recent rate hikes, the value of these assets had dropped drastically. Venture capital firms began to panic about a potential bank run. This is exactly what happened to Silvergate, another US bank that went bankrupt the day the SVB announced its results.
Venture capital investors began advising portfolio companies to withdraw funds. By Friday, $42 billion was requested by SVB customers. To keep up with demand, the bank had to sell mortgage bonds at dire prices. This resulted in huge losses leading to the explosion of the SVB. Pointing to this crash, DappRadar states in a new report that DeFi tends to be highly sensitive to market worries and crashes.
Whales, Uniswap and buying them
DappRadar states that with the collapse of SVB, whales turned to DeFi coins, especially Uniswap (UNI). Also last weekend, USD Coin (USDC) lost pegs against the US dollar following news that $3.3 billion of the stablecoin’s issuer Circle’s $40 billion reserves remained in the collapsing SVB. DappRadar explains that this rollercoaster has had a ripple effect on the DeFi industry. Notably, the total locked value in the DeFi space fell after this development. The said value fell from $79.28 billion to $71.61 billion.
The news created panic among investors, sparking a significant sell-off and a drop in TVL. But the USDC reserve deposits held at Silicon Valley Bank were fully public, which helped stabilize the market. This announcement allowed the locked value in DeFi to reach $81.15 billion, a 13 percent increase. Additionally, DappRadar notes that the number of unique active wallets interacting with DeFi contracts increased from 421,026 on March 8 to 477,094 on March 11, up 13 percent. In addition, the number of transactions increased by 23 percent from 1,356,483 to 1,668,992.
According to market intelligence platform, decentralized exchange (DEX) Uniswap (UNI) was behind this increase in activity. On Saturday, March 11, it was stated that Uniswap faced a volume of $14.4 billion. Also on Saturday, the transaction size in Uniswap V3 was $170,080. According to DappRadar, this amount is double the normal. This indicates that DeFi whales were quite active last weekend. Among other DeFi coins in the focus of whales, the biggest coins by market cap are as follows:
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