Banks Bust, Bitcoin Booms: Price Skyrockets 40% During US Banking Crisis
05 Giugno 2024 - 7:10AM
NEWSBTC
Bitcoin, the enigmatic digital currency, is back in the spotlight
as the US banking system grapples with mounting stress. While some
predict a stratospheric rise to $1 million per coin, fueled by
economic woes, others remain skeptical. Related Reading: Is This
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GME Move Banking On Bitcoin’s Rise? Bitcoin advocates see it as a
beacon of stability in a storm. Unlike traditional assets tied to
the health of institutions, Bitcoin boasts a finite supply and
decentralized nature. This, they argue, positions it perfectly to
benefit from a “flight to safety” scenario, where investors seek
refuge from a potentially collapsing banking system. The recent
history seems to support this narrative. In March 2023, the
failures of prominent institutions like Silicon Valley Bank
coincided with a 40% surge in Bitcoin’s price within a week.
Industry figures point to this as evidence of Bitcoin’s role as an
“uncorrelated asset class” – a hedge against traditional financial
turmoil. Further bolstering this argument is the latest report by
the Federal Deposit Insurance Corporation (FDIC). The report paints
a concerning picture, highlighting a worrying trend of unrealized
losses on securities held by US banks. These losses, driven by
rising interest rates, have ballooned to over $500 billion.
Additionally, the number of banks on the FDIC’s “Problem Bank List”
has grown from 52 to 63 in just one quarter, raising fears about
the overall health of the sector. Million-Dollar Dream Or Flight Of
Fancy? While the potential for Bitcoin to gain value seems
undeniable, the ambitious price target of $1 million faces strong
headwinds. Experts warn that such a dramatic surge might come at
the cost of a full-blown economic meltdown, a scenario that
wouldn’t necessarily benefit Bitcoin in the long run. Furthermore,
Bitcoin’s historical correlation with other assets is not static.
While periods of weak correlation exist, there have also been
instances of strong correlation, particularly during broader market
downturns. This casts doubt on Bitcoin’s ability to completely
decouple itself from a struggling traditional financial system.
Related Reading: Dogecoin Under The Microscope – Historical Data
Points To Rebound Another factor to consider is the recent uptick
in the M2 money supply, a metric representing the total money
circulating in the economy. Historically, periods of M2 expansion
have coincided with Bitcoin price increases. However, the interplay
between money supply and Bitcoin in an environment with a
potentially shaky banking system remains an open question. The Road
Ahead For Bitcoin Bitcoin’s future is a bit of a guessing game
right now. Banks in the US are having some problems, and that could
make Bitcoin more valuable. But if the whole economy goes downhill,
even Bitcoin might suffer. So, it all depends on how bad things get
with the banks and the economy in general. Featured image from
Pngtree, chart from TradingView
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