Banks going under could be bullish

This is just me providing my hot take but interested to hear if anyone has a similar perspective.

It was pretty sad to see Silvergate go under. On the surface i dont think they did anything particularly shady (not more than any other bank), just a combination of being less liquid from bonds/MBS as well as the crypto market reeling. This now concentrates the fiat rails into Signature Bank so fingers crossed.

Seeing Silicon Valley Bank as the broader banking sector today though it seems like there’s a significant stress test taking place in traditional finance right now. Just some stats:

-$SVB is a top 20 bank and is -60% on the day. Get a load of this shitcoin!

-Today is the worst day for bank stocks in 3 years with the top 4 losing $47 billion.

There’s probably alot of banks swimming naked but dont have their assets fully marked-to-market. The increased cost of deposits, long duration securities to generate yield, and straight up fear with bank runs popping up everywhere means that there could be more -60%s coming. Youve got all these held-to-maturity securities in deep deep unrealized losses.

This could be bullish on the subject of a pivot. Alot of people said the Fed won’t pivot until something breaks, well what we are seeing is some serious bend across the institutions that uphold this grand charade. Big red numbers flashing on the screens of their money makers could just rattle the Fed and take 50bps on the table.

Its not impossible, the Fed has slowed rate hikes earlier than expected in 2019 to “assess economic conditions” and after that a 17% rally ensued over the next few months.

Crypto banks going under fuels their narrative, but traditional banks going under is where their concern is.

Edit: just checked Fed Futures and 50bps probability has gone down 15% today on the $SVB news