In the day leading up to the bank’s collapse, multiple prominent venture capitalists took to Twitter in particular -- and used their large platforms to raise alarms about the situation
Customers withdrew $42 billion in a single day last week from Silicon Valley Bank, leaving the bank with $1 billion in negative cash balance, the company said in a regulatory filing. The staggering withdrawals unfolded at a speed enabled by digital banking and were likely fueled in part by viral panic spreading on social media platforms and, reportedly, in private chat groups.
“What made the Silicon Valley Bank run unique was the ease with which its customers could execute withdrawals and the speed with which news of Silicon Valley Bank’s impending demise spread,” Ben Thompson, an analyst who tracks the tech industry, wrote in a post on Monday. “It was the speed, fueled by zero distribution costs for both rumors and withdrawals, that was so destabilizing.” Silicon Valley Bank was arguably uniquely susceptible to those factors given its tech-focused customer base.
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