Global stock markets have recently been influenced by the Federal Reserve's interest rate hikes. The probability of a continued increase in March is very high, and whether May will be the last hike is still uncertain in the current market. A basic consensus is that the possibility of a shift in Federal Reserve interest rates in 2023 is minimal.

This means that the highest interest rates since 2007 will be maintained for a considerable period, with investors in the global financial markets on edge to avoid a recurrence of events similar to the 2008 subprime crisis.

The current state of the market can be aptly described as being on tenterhooks, with every little movement causing alarm.

Interestingly, while 2008 was marked by the Lehman Brothers incident, in 2023, the U.S. banking sector is clearly under the investors' microscope. On March 9th, U.S. bank stocks plummeted, significantly undermining the confidence of global investors. Not only did the U.S. stock market suffer a sharp decline on that day, but on March 10th, Asian and European stock markets, which were in session, almost universally faced losses.

Undoubtedly, as the Federal Reserve's interest rate hikes approach their end, investors are extremely fragile internally.

The culprits behind this debacle are once again two bank stocks. One is Silvergate, which provides traditional banking services to cryptocurrency exchanges, and the other is Silicon Valley Bank. The two banks plummeted by 42.16% and 60.41% respectively in a single day, significantly dragging down other bank stocks with the extent of the decline being staggering.

The issues faced by Silvergate are indeed very serious. "Ceasing operations and fully refunding deposits, ending banking activities," is clearly a major event that warrants such a significant drop.At its core, the FTX cryptocurrency trading platform declared bankruptcy in November 2022, prompting clients who had invested through Silvergate to withdraw their funds en masse, leading to a run on the bank. It is not difficult to see that Silvergate indeed faced difficulties.

In 2022, Xianxian Finance also pointed out on more than one occasion that the Federal Reserve's interest rate hikes in this cycle would inevitably burst the largest bubble sectors, and the bubble in the cryptocurrency field has clearly begun to gradually burst.

In terms of financial markets, the idea that simply "severing" the cryptocurrency market would not impact the entire financial system is obviously naive. Looking at the FTX bankruptcy incident, it affected institutional investors and the banking system. I believe that similar events are likely to occur again because the Federal Reserve's interest rate hikes are not yet over, and the U.S. financial system is far from its most difficult period.

The Silicon Valley Bank plummet event is unrelated to cryptocurrency and is related to investment.

Affected by the Federal Reserve's interest rate hikes, the prices of fixed-income securities such as mortgage-backed securities and Treasury bonds fell, resulting in an after-tax loss of $1.8 billion for Silicon Valley Bank. At the same time, to make up for this loss, Silicon Valley Bank plans to raise funds and issue convertible preferred shares and common shares to investors.

In terms of this loss, it belongs to investment failure and is not enough to cause such a large drop in stock prices. Issuing new shares obviously increased the selling pressure on investors, and coupled with the sharp drop in Silvergate, we can only say that behind the huge drop in Silicon Valley Bank's stock price, there is obviously a certain amount of "misinjury."

Behind the "misinjury" is the logic mentioned at the beginning of Xianxian Finance. In the year 2023, the market is worried that the Lehman event will be staged again, and the banking industry has become less confident in this year.

Looking at the two events, they seem to be accidental, but behind the accident is actually a necessary event. The cryptocurrency bubble that was blown up to the sky will eventually burst, it's just a matter of time, and the probability of being gradually burst in the year 2023 is very high; due to the Federal Reserve's aggressive interest rate hikes, the banking industry's investment losses are "systemic risks", which are much smaller than the risks related to cryptocurrency and are relatively controllable. However, the market will amplify risks during this sensitive period, stock prices will plummet, investors will be impacted, and even a series of risks may arise due to the sharp drop.

For example, in 2021, Bill Huang's bankruptcy incident forced many financial institutions to step on the mine.

Overall, in 2023, the U.S. financial market has more risks than opportunities. It is beneficial for the U.S. and the world not to have systemic risks.