03 May 2023 Josphat Kariuki
The US Banking Crisis Continues, Could Bitcoin Explode?
The banking crisis that originally affected the United States of America in Q1 of this year appears to be resurfacing. The previous time this occurred, Bitcoin price had a good time, and based on the circumstances, it appears that this time will likely be no different.
Many regional bank stocks have crashed in just a few minutes during the day over the past 24 hours, forcing the suspension of their trading. PacWest Bancorp, which fell by 29%, Western Alliance Bank, which fell by 25%, and Metropolitan Bank, which fell by roughly 24%, were at the top of the list.
Even worse than the current state of the market, however, is the value of these stocks' year-to-date decline. The Kobeissi Letter, a well-known financial pundit, made these banks well-known.
All told, the losses caused by the failure of the Silicon Valley Bank, Signature Bank, Silvergate Bank, and First Republic Bank totaled close to $2 trillion since January 1.
The Federal Deposit Insurance Corporation (FDIC)'s decision to take no action was also covered by the commentator. According to The Kobeissi Letter, the regulators do not want the public to view their efforts as "bailouts" in light of what occurred in 2008...This choice is thought to be "safer," however this is only a temporary impression.
They claimed that the top 15 banks might someday come to control the whole US banking sector. The largest banks already own 75% of all deposits in the US, and this percentage may rise to 90%. Simply expressed, the negative evolution in the US financial industry favors Bitcoin.
As some US banks struggled, the price of Bitcoin increased by more than 2% on May 2 to close above $28,500. Furthermore, there would be room for more expansion if the banking crisis persisted. Similar to the Q1 banking crisis, BTC had a close to 40% rise as a result of its dissociation from the US stock market.
Furthermore, according to the Net Unrealised Profit/Loss indicator (NUPL), just under a third of Bitcoin’s market cap is currently making money. Given that nearly 70% of the market capitalization has yet to experience gains, the indicator's presence in the upbeat zone further suggests that there is more growth in store for the cryptocurrency.
Source: Look Into Bitcoin
The absence of regulatory clarity is still a problem, though, as it seems to be deterring investors from the US. Instances of the same are currently existent, according to Blockworks' founder Jason Yanowitz, as Coinbase this week launched its worldwide derivatives market for users in qualified regions outside the US.
“Just got off the phone with a killer founder. He said it's no longer worth the risk to build a crypto business in the United States so he's pivoting. Slowly but surely we're killing innovation and pushing our best entrepreneurs offshore.” Yanowitz noted.
A Web3 cloud infrastructure firm named Syndica also established a business in Dubai this year as a result of the unpredictability of the local legal environment. If such circumstances persist in the nation, the cryptocurrency market would eventually suffer, which would not be good for Bitcoin or the altcoins.Bitcoin btc Bitcoin price bitcoin news cryptocurrency news crypto news Crypto Price Banks US