Journal article · 2023

Silicon Valley Bank bankruptcy and Stablecoins stability

Luca Galati, Francesco Capalbo · International Review of Financial Analysis · Elsevier BV

The work examines the contagion effects across major digital assets during the Silicon Valley Bank collapse in early March 2023. It finds evidence of contagion among major stablecoins and Bitcoin, along with significant abnormal movements in stablecoin cumulative returns and volumes.

Read the source ↗ · DOI

Research questionTo what extent does the collapse of a commercial bank spread contagion across cryptocurrency markets?

MethodologyBEKK model

Data / sampleSilicon Valley Bank collapse period in early March 2023

Constructscontagion effects; stablecoin cumulative returns; stablecoin volumes

Key findings

Evidence of contagion across major stablecoins and Bitcoin was found.
Substantial abnormal movements in stablecoin cumulative returns and volumes were observed.
There was a 'flight to safety' from less to more authoritative and trusted stablecoins.

Topics: Financial Stability & Systemic Risk

Cite this

Luca Galati, Francesco Capalbo (2023). Silicon Valley Bank bankruptcy and Stablecoins stability International Review of Financial Analysis.

BibTeX

@article{galati2023siliconvalleybankbankruptcy,
  title = {Silicon Valley Bank bankruptcy and Stablecoins stability},
  author = {Luca Galati and Francesco Capalbo},
  year = {2023},
  institution = {Elsevier BV},
  journal = {International Review of Financial Analysis},
  doi = {10.1016/j.irfa.2023.103001},
  url = {https://doi.org/10.1016/j.irfa.2023.103001},
  note = {Indexed by Stablecoin Beat},
}

Indexed by Stablecoin Beat — we link to and summarise sources; we do not host copyrighted full text, and summaries are our own. · All research · Methodology