Is Bitcoin the Safe Haven in the US Banking Crisis?
Bernstein's analysts, Gautam Chhugani and Manas Agrawal, suggest that the numerous bank collapses could push investors away from traditional finance and towards cryptocurrency.
They think the gap between Treasury rates and bank deposit rates will continue to hollow out banks, leading to another round of mass migration to money markets.
Recent events have intensified concerns about a potential contagion in the sector. First Republic Bank, one of the top 20 largest financial institutions in the US with over $200 billion of assets under management, sees its shares crashing to record lows.
The 55% drop occurred shortly after the entity revealed its disappointing Q1 earnings report.
Despite the initial shock, Bitcoin’s price has spiked substantially during the recent banking crisis. It soared to $28,500 a few days after the collapse of Silicon Valley Bank (SVB) and continued its increase in the following month.
READ MORE: Bitcoin at a Crucial Crossroad: Will it Reach $33,000?
The analysts also point out that the Federal Reserve’s likely response to the banking crisis would be to launch another money-printing campaign. This would bring back the role of Bitcoin as digital gold and urge investors to purchase BTC.
In summary, the current banking crisis in the United States could potentially lead to mainstream Bitcoin adoption, with weakening banks pushing investors toward cryptocurrency.
Bitcoin’s price has increased during the recent banking crisis and tends to perform well during significant financial issues. The analysts advise investing in BTC, as it may soon enter a new bull run due to the current condition of traditional finance.
Currently, BTC is hovering around $29,000 and investors are awaiting for the moment when $30,000 is turned into a support level.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
