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Putting everything into US treasury bonds is what sank SVB, so putting everything into AAA rated bonds isn't safe either.
by foepys 4y ago
Putting everything into US treasury bonds is what sank SVB, so putting everything into AAA rated bonds isn't safe either.
- xuki 4y agoSVB bought long duration bonds, they could not wait until maturity to get the money back. Keep rolling short duration bonds would be less risky.
- quickthrowman 4y agoThe interest rate risk of a 10y t-note is a couple orders of magnitude higher than the interest rate risk of a 1 month t-bill, because of duration. USDC would have to wait just over a month for all of their t-bills to mature, SVB was looking at waiting 8 years. Massively different risk profiles.