Banking Crisis Looms: Is Crypto The Future Of Secure Investing?
- The collapse of two of the top United States banks, Silicon Valley Bank and Signature Bank, has caused investors to search for better investment tools.
- The $25 billion bailout by the United States federal government has raised questions about the fractional reserve banking system.
- Michael Casey believes that a similar situation to the 2012-2013 Cypriot financial crisis could be unfolding, which fueled Bitcoin’s rally in 2013.
Collapse of US Banks Causes Investor Uncertainty
The collapse of two of the top United States banks, Silicon Valley Bank and Signature Bank, has been considered the most bullish thesis for Bitcoin and other leading digital assets. Moreover, the top digital assets have gained over 7 percent in the past 24 hours as investors scramble for more secure investment tools.
Fed Bailout Questions Fractional Reserve Banking System
The $25 billion bailout by the United States federal government has investors questioning the fractional reserve banking system that requires lenders to maintain only a small portion of deposits available for withdrawal while the rest are lent out to fuel economic activity. All banks around the world operate in a similar manner, thus piling risk of higher inflation should more bank runs occur at an unprecedented rate. This could trigger a banking crisis worse than 2008’s financial crisis. With tomorrow’s CPI data announcement from Fed economists anticipate it will soon divert from its fight against inflation.
Bitcoin Benefits From Banking Crisis?
According to Michael Casey author of ‚The Age of Cryptocurrency‘, Bitcoin could benefit from such a scenario like it did during 2012-2013 Cypriot financial crisis when it rallied significantly. Peter Schiff also agrees with this as he tweeted on Thursday that „the real problem is liquidity“ which was already bad before SVB (Silicon Valley Bank) failed on Friday.Could Crypto Become More Popular Than Traditional Investment Tools?
With traditional investment tools becoming increasingly risky due to their vulnerability towards global events such as Covid-19 or Brexit, crypto currencies may become even more popular amongst investors who can trust decentralized systems rather than centralized ones run by governments or institutions whose motives may not always be transparent or clear. Investors are now turning towards Bitcoin and other leading digital assets as they look for safer ways to invest their money in order to protect themselves against future risks.
< h2 >Conclusion
As global economies continue to struggle and uncertainty still looms large among investors due to instability in traditional markets, crypto currencies may start gaining traction as an alternative and secure way for people to invest their hard-earned money without having any worries about potential losses due to market volatility or manipulation from large institutions or governments. It remains yet seen if this will indeed happen but one thing is certain; crypto currency is here to stay and its impact on global economies is set to increase exponentially over time.