Banks Bust, Bitcoin Booms: Price Skyrockets 40% During US Banking Crisis

Christian Encila

1 year ago

3 mins read

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The mysterious digital currency Bitcoin is once more in focus as the US banking system struggles with growing stress. Driven by economic problems, some estimate a stratospheric increase to $1 million per coin; others remain dubious.

Banking On Bitcoin’s Rise?

Advocates of bitcoin see it as a lighthouse of consistency amid a tempest. Bitcoin has a limited supply and distributed character unlike conventional assets connected to the state and institutions. This, they contend, puts it exactly in position to profit from a “flight to safety” situation in which investors flee a possibly failing financial system.

The current past seems to confirm this story. The collapses of well-known establishments like Silicon Valley Bank in March 2023 coincided with a 40% increase in the price of Bitcoin in a one-week period Industry figures point to this as proof of Bitcoin’s function as a “uncorrelated asset class,” a defence against conventional financial turbulence.

The most recent assessment by the Federal Deposit Insurance Corporation (FDIC) strengthens this case even more. The study presents a disturbing picture, stressing an alarming tendency of unrealised losses on securities kept by US institutions.

Driven by increasing rates, these losses have soared to around $500 billion. Furthermore, in only one quarter the count of banks on the FDIC’s “Problem Bank List” has changed from 52 to 63, which causes concerns regarding the general state of the industry.

Million-Dollar Dream Or Flight Of Fancy?

Although Bitcoin’s value potential is clear-cut, the ambitious $1 million price target runs into great challenges. Such a significant increase could lead to a full-fledged economic crisis, which would not always help Bitcoin over the long haul, experts caution.

BTCUSD trading at $71,222 on the 24-hour chart: TradingView.com

Moreover, the historical link of Bitcoin with other assets is not fixed. Although weak correlation periods abound, there have also been cases of substantial correlation, especially in more general market declines. This questions whether Bitcoin can entirely separate itself from a faltering conventional banking system.

Another element to take into account is the recent increase in the M2 money supply, a statistic gauging the whole amount of money in the economy. Past times of M2 expansion have matched rises in Bitcoin prices. Still up for debate, though, is how Bitcoin interacts with money supply in an environment with maybe unstable financial systems.

The Road Ahead For Bitcoin

Right now, the future of Bitcoin is rather like a guessing game. Given various issues facing US banks, Bitcoin may become even more valuable. Even Bitcoin might suffer, though, if the whole economy falls out. Therefore, everything depends on the state of affairs with the banks and the economy overall.

Featured image from Pngtree, chart from TradingView

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.