With global lockdowns, venture capitalists from all over the world, Began investing in software companies. People saw that even during the lockdown when everything else had to shut down, Software-based companies are the most successful. That run through computers and mobile phones. This is why in 2021, the startups raised a lot of money. In America, $330 Billion was raised in total. Almost double the record of the previous year.
If these technology-based startups have so much money They would want to deposit the funds with the bank. And Silicon Valley Bank was the #1 preference of technology-based startups. This is why in March 2021, the value of the total deposits with the bank was around $124 Billion. It was at $62 Billion the year before. A 100% increase.
This was a huge jump with so much money being deposited into the bank suddenly. Compare this to the other banks, They did not see such a large jump. JP Morgan Chase Bank saw an increase of 24% only. Since the bank had so much money in the form of customer deposits, They decided to use it to make even more money. So Silicon Valley Bank used the billions of dollars, To invest in government bonds.
