Bitcoin Breaks Through Against the Backdrop of the US Banking System Collapse
Bitcoin’s price has been acting differently in the last couple of weeks. This latest BTC news gives a clear market signal about how crypto is independent and strong. For the first time, the queen of cryptocurrencies is acting positively in response to the collapse of Silicon Valley Bank (SVB).
The US Banking System Collapse
The world was shocked after the closure of the Silicon Valley Bank (SVB) on Friday, March 10. It is the biggest failure in the US since the financial crisis in 2008. SVB could no longer cope with the massive withdrawals of its clients, who are mainly tech players. The US authorities, therefore, made an emergency appointment, took possession of the bank and entrusted its management to the Federal Deposit Insurance Corporation (FDIC). Let’s start from the beginning to understand the story behind this failure. In 2021, SVB put a lot of its money into bonds. They thought that this was a safe way to invest. But, after some changes made by the US government, it became harder to get loans. This news negatively influenced startup companies, including the ones supported by SVB. At the same time, the value of the bonds went down because of the interest rates. As a result, SVB sold some of its bonds to fix the situation and get money back. However, they could sell them for less than they paid for them. All of these facts caused instability inside this financial structure. Customers were worried and started cashing out their money as a precaution.
Concerns and How Crypto Benefits From This Situation
Since the collapse of Silicon Valley Bank on March 10, the crisis in the banking sector in the United States benefits cryptocurrencies. The BTC price was up to 30% over 14 days, valued at $28,500. In addition, several cryptocurrencies, such as Ethereum, Solana, XRP and more, experienced a big jump in their values. The increasing BTC value shows us a revival of interest in the crypto industry for the past weeks. This interest can be noticed by the total value of tokens circulating in the blockchain or by the big jump in the number of crypto app downloads. Cathie Wood, the founder of Ark Investment Management, said she was unsurprised at how the current Bitcoin cost has recently risen in value. Furthermore, she added that blockchain technology is decentralized and auditable. This makes it more transparent than traditional financial institutions.
Bitcoin Booms in the Wake of Crisis
There is a principal reason for this rise. Bitcoin’s current value is due to a disconnection between cryptocurrencies and the traditional financial markets. Indeed, recent events have shown that the Bitcoin exchange rate is independent of external factors. This means that cryptos don’t react to traditional market fluctuations, which gives them a certain independence from what happened to Silicon Valley Bank. Also, Bitcoin boomed due to the crisis for many other factors. The first factor is the growing popularity of cryptocurrencies. Also, investors now believe in the blockchain future. Second, Bitcoin has a higher adoption in trades and high-tech.
What Awaits Banks and Crypto in the Near Future?
No one can really predict the future of banks and cryptocurrency. However, we can conclude some potential events that may occur:
Payment Method Integration
After the collapse of Silicon Valley Bank, businesses will include crypto more and more. Banks will try to find new ways to integrate Bitcoin as a reliable payment method. Also, we will see some important collaborations between crypto exchanges and banks; this will scale up the BTC price prediction.
New Crypto-Banks
Moreover, there is a big chance to witness the development of new cryptos. Central banks around the globe will study the possibility of creating their own cryptos and Bitcoin wallets. This will be used as a secure payment method in trading and will provide a better choice for their clients as no one prefers to walk with cash anymore.
The Blessing of Governments
Another prediction is the increase of crypto regulations with the blessing of central banks. There are new upcoming laws under the supervision of governments and financial institutions. It will reinforce the protection and prevent fraud, noting that new regulations will positively influence the crypto sector and its operations.
Business Adoption
According to Bitcoin news prediction, the competition between crypto exchanges, high-tech corporations and banks will increase. Every business will try to gain a bigger market share. This is why traditional banks will try to adapt their business models to stay competitive in front of the fast-growing economic landscape. In general, what awaits banks and crypto is still unclear, but the above points will likely happen in the coming days.
Conclusion
It is worth noting that since the financial crisis of 2008, banks must provide strong guarantees to their national regulators. For example, they must justify a higher minimum level of capital intended to absorb possible losses in the future because the world can no longer afford another crisis in the banking system.
FAQ
What are the forecasts for the future of crypto coins? Should I invest in Bitcoin or wait?
Can I use my Bitcoin account as collateral to secure a loan from a lender? How does my creditworthiness as a depositor affect the details of the loan agreement?
