After an extensive study on the impact of rising interest rates on banking stability, four academics have warned that the current banking crisis could spread. According to these academics, nearly 186 U.S. banks have operating models similar to Silicon Valley Bank (SVB) and are thus vulnerable to a bank run. This banking crisis is shaking up the traditional financial system, but it is also causing Bitcoin to jump. Several predictions have been made that the value of Bitcoin will soon rise.
The collapse of Silicon Valley Bank (SVB) is just the beginning
Are we heading straight for a large-scale banking collapse in the United States? This is what four academics fear in a study published on March 13. Erica Xuewei of the University of Southern California, Gregor Matvos of Northwestern University, Tomasz Piskorski of Columbia University, and Amit Serou of the Stanford University noted that US banks are fragile in 2023.
According to the four scholars, nearly 186 US banks have vulnerabilities similar to Silicon Valley Bank (SVB). This banking institution went bankrupt on March 10, resulting in a wave of panic in the crypto market. This would cause a risk of loss of no less than 300 billion dollars, alert the four academics.
Nearly 190 banks are at risk of depreciation, even for insured depositors!Study of 4 academics.
The collapse of SVB is notably due to the bank run caused by the rise in the interest rate in the USA. As a reminder, a bank run is a kind of panic that seizes bank customers, pushing them to withdraw their funds massively. Yet banks still do not keep all customer funds. They use part of it to pay for securities or give credits repayable over a given period. Banks thus find themselves unable to satisfy all customers and close their doors. This is what recently happened to the Silicon Valley Bank, to Silvergate Bank or even to Signature Bank.
The banking crisis strengthens Bitcoin, and it will continue!
While the banking system is in the midst of a crisis in the United States, Bitcoin is doing quite well. Bitcoin which was trading around $22,000 when Silicon Valley Bank (SVB) collapsed has been steadily rising. Bitcoin is trading near $27,200 at the time of writing. The queen of cryptocurrencies had never reached this value since June 2022. It seems that citizens who withdraw their funds from banks are placing them in … Bitcoin.
The current banking crisis in the United States has given rise to predictions on the Bitcoin market. The first prediction is that of the CEO of the data analysis company Messari. Ryan Selkis think that bank failures will continue and Bitcoin will be used as a safe haven. Its value will thus reach $100,000 in the next 12 months. To make this possible, Ryan Selkis advocates that institutions buy bitcoin.
Think Ryan Selkis’ prediction is too optimistic? Then Belaji‘s will blow your mind. The former CTO of Coinbase thinks Bitcoin will reach $1,000,000 within … 90 days. This increase in Bitcoin’s value will be driven by hyperinflation in the United States.
Belaji seems so convinced by his prediction that he is willing to bet. He has put $1 million on the line and has invited anyone who doesn’t agree with his prediction to put the same amount on the line. After 90 days, whoever is right will get the $2 million. Good deal, right?
The news about the health of the U.S. banking system is becoming more and more disturbing. It is increasingly likely that the current crisis will spread beyond the three banks that have been affected so far. Meanwhile, bitcoin is the haven for those fleeing the banking system, fulfilling its original role perfectly.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.