The worst week in crypto history... so far.
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Do Bank Runs Just Apply to Banks?
Before we had central banks, there were bank runs all the time. The only way we found of avoiding them is to have a lender of last resort. So that's what a central bank now avoids - it provides liquidity. And if push comes to shove, it can temporarily bail out the entities as long as they're solvent. But do bank runs just apply to banks? Well, let's say you've got a money market fund. It's really just like cash. You put in a dollar, you can take out a dollar at any time and you earn a tiny, runnable rate of interest because they invest in super safe stuff.
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