Banking Crisis Will Propel Bitcoin Higher – InvestAnswers
A cryptocurrency strategist suggested that the banking crisis in the United States is an advertisement for traders interested in Bitcoin.
In a recent interview on Crypto Banter, the anonymous host of InvestAnswers said that he believes that people are increasingly investing in Bitcoin to protect themselves against the potential fallout from the US banking crisis.
According to the strategist, many individuals who lived through the Great Recession of 2008, triggered by a banking crisis, now view Bitcoin as a safer place to invest their wealth.
He added that these individuals have been flooding into the cryptocurrency market recently, with many making their first foray into the cryptocurrency market.
The strategist noted that two groups of people are currently investing in BTC. The first group is comprised of those who have been involved in cryptocurrency for some time and are already familiar with the market. The second group is made up of newcomers to the market who are turning to the asset as a result of concerns over the banking crisis.
“What’s happening is you’ve got people coming into Bitcoin. All they know is Bitcoin. They don’t know crypto. But they’re afraid for their fiat, therefore they’re buying Bitcoin first. That’s what you’re seeing here,” the strategist said.
He suggested that the recent banking crisis has provided one of the best advertisements for Bitcoin since the Great Recession of 2008. He believes that this crisis has convinced many people to invest in the flagship cryptocurrency to protect their wealth against potential economic instability.
Despite the recent volatility in the cryptocurrency market, Bitcoin has performed remarkably well over the past few weeks. It briefly surpassed the $26,000 mark on March 14th after dipping as low as $19,000 the previous week. Many investors believe that the currency is poised for even more significant gains in the coming months, particularly as more people become aware of the potential benefits of investing in Bitcoin.
The 2008 Banking Crisis
The 2008 banking crisis, was primarily caused by the collapse of the US housing market.
Banks had been lending money to people who could not afford to repay their loans, which led to a large number of defaults on mortgage payments. These defaults caused a sharp drop in the value of mortgage-backed securities and other financial instruments backed by these mortgages, leading to losses for banks and other financial institutions.
As these losses mounted, banks became increasingly hesitant to lend money to each other, causing a freeze in the credit markets. This, in turn, led to a liquidity crisis, where many banks and other financial institutions could not access the funding they needed to continue operating.
The crisis was also exacerbated by risky financial practices such as excessive leverage, complex financial products, and inadequate regulation of the financial industry.
Ultimately, the crisis led to the failure of several large banks, including Lehman Brothers, and triggered a global recession that lasted for several years.