New Banking Crisis Seems Possible, Meaning Crypto Can Go Even Higher
Last Updated on 6 November 2023 by CryptoTips.eu
When the first Silvergate bank went bankrupt in early March (some six weeks ago) everyone pointed an accusing finger to the world of crypto. Silvergate was very closely associated with the cryptosphere, especially Sam Bankman-Fried’s large FTX platform.
A few days later, the first problems also started to appear at Signature bank and Silicon Valley Bank. A week later, Credit Suisse was also in trouble (and got taken over by it’s main rival UBS). A few more days later, major banks in the US lent billions to First Republic bank to keep that one afloat.
The global media realized that the cause of it all was not crypto but the rising interest rates that the Federal Reserve imposed on the banks as well as the (still) high inflation.
During those few weeks in March, Bitcoin moved ever higher (the established Wall Street Journal admitted that “Bitcoin Booms in wake of banking crisis”) and other major digital coins were seen as a “safe haven” of sorts (together with gold).
Charles Schwab
In the last week of March and the first of April, the world’s attention shifted again to the war in Ukraine, the arrest of Donald Trump and the Pentagon leaks scandal, but the banking crisis continued to simmer in the background.
Now the banks (certainly in the USA) seem ready to return to prominence, with blaring headlines reminding investors that the banking crisis is far from over. US savers withdrew another $60 billion in recent weeks from three major financial institutions, namely Charles Schwab, State Street and M&T. At State Street in particular, investor reaction was fierce. The stock price of that medium-sized bank lost 9% on Monday alone.
Don’t be surprised if it takes a while for these names to show up in European media. If this situation expands, you can count on Bitcoin (and gold) being seen as safe havens again.
