[oldalum]

a large amount of 1.25% yielding Treasuries is now worthless and can't be sold. 

Not so. The Treasuries market is enormous and among the most liquid there is, if not the most. SVB's Treasuries (and other bonds) can be sold for a value low enough to generate a yield-to-maturity equal to the current yield on a similar bond of equivalent time to maturity. The problem is, selling those Treasuries won't generate the needed amount of cash because their value has decreased relative to when they were bought. By how much? Plugging numbers into an online bond value calculator, if SVB bought a 10-year Treasury when 10-year Treasury interest rates were at their low in 2020 (~0.55%), by last week that bond would have lost very roughly about 25% of its value. That's more than enough to fuel a liquidity crisis, but it ain't 100%. But SVB might have bought bonds with longer terms than 10 years (I don't see any published description of their actual portfolio's characteristics) in which case they could have lost a lot more than that (but still not 100%).

[oldalum]

a large amount of 1.25% yielding Treasuries is now worthless and can't be sold. 

Not so. The Treasuries market is enormous and among the most liquid there is, if not the most. SVB's Treasuries (and other bonds) can be sold for a value low enough to generate a yield-to-maturity equal to the current yield on a similar bond of equivalent time to maturity. The problem is, selling those Treasuries won't generate the needed amount of cash because their value has decreased relative to when they were bought. By how much? Plugging numbers into an online bond value calculator, if SVB bought a 10-year Treasury when 10-year Treasury interest rates were at their low in 2020 (~0.55%), by last week that bond would have lost very roughly about 25% of its value. That's more than enough to fuel a liquidity crisis, but it ain't 100%. But SVB might have bought bonds with longer terms than 10 years (I don't see any published description of their actual portfolio's characteristics) in which case they could have lost a lot more than that (but still not 100%).