If you believe in the US government, then yes cautious banking crisis from March 2023 an exception. “I can assure committee members that our banking system is sound and that Americans can be confident that their deposits will be available when they need them,” Janet Yellen said in March.
Now it’s a month later and it seems that the US banking system is a little less solid than Yellen would have us believe. The chart below shows First Republic Bank’s painful decline yesterday.
And there?
Essentially, Yellen is right that Americans’ deposits are safe because the Federal Reserve has a monopoly on the dollar. If the Federal Reserve wants to, they can bail out any bank. The downside, of course, is that it reduces reliance on the US dollar as a means of savings.
The reality, however, is that the rate hikes of the past 12 months – during which the Federal Reserve raised rates from 0% to 5% – are now beginning to take their toll on US bank finances.
That’s exactly what we saw yesterday with First Republic Bank, which said when it released its quarterly results that it was considering selling $100 billion in assets.
These are statements that a bank should not make, because the market interprets them as: “This bank is about to collapse.” The landscape currently unfolding around First Republic Bank is almost exactly the same as Silicon Valley Bank in March.
What does this mean for Bitcoin?
Bitcoin seems to be benefiting again from the turmoil in the US banking sector. In the last 24 hours, the signals are up 4.86% and Bitcoin is currently trading at $28,726. This is notable as the sentiment started to turn a bit bearish after Bitcoin lost $30,000 last week.
Bitcoin also seems to be withdrawing from the US stock indices for a while. While Bitcoin is at a remarkable 24-hour high, the US S&P 500 is down 1.58%.
With the new episode of the banking crisis in the United States, the story of Bitcoin as a safe haven in times of economic disaster has come back to the fore.
This is ultimately what Satoshi Nakamoto designed his Bitcoin for. Bitcoin is a response to weaknesses in the traditional financial system that have surfaced more and more in recent weeks. It is quite possible that Bitcoin still has some spectacular days ahead of it.
Source: Btc Direct
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
