[rootsudo]

It does not protect if the asset invested in goes down in value.

FDIC is protection against the bank being insolvent.

SIPC does not protect customers against losses from the rise and fall in the market value of investments.

https://www.sipc.org/for-investors/what-sipc-protects

[greyface-]

There's no disagreement here. FDIC/SIPC protect against insolvency. The context of this discussion is borrower credit risk, i.e., the risk that the borrower becomes insolvent.