Banking crisis? This is why Bitcoin was built

You may have noticed that the United States is in the throes of a banking crisis. The misery all started with the liquidation of Silvergate Bank, the bank of the crypto world, and culminated so far with the collapse of Silicon Valley Bank, America’s 17th largest bank. Each one seems to be succumbing to the pressure of the Federal Reserve’s rate hikes, which are sucking liquidity out of the financial system.

So far, this has not helped the Bitcoin price, but remember that this is ultimately why Satoshi Nakamoto decided to launch Bitcoin in 2009. Bitcoin is a child of the global financial crisis of 2008, something that was clearly reflected in Nakamoto’s message in the first block of the Bitcoin blockchain.

Banking crisis coming

Satoshi Nakamoto chose to include the January 3, 2009 headline “Chancellor on brink of second bailout for banks” from The Times in the first block of the blockchain. With this he refers to the government bailing out banks with taxpayers’ money on the backs of the population. At the time of writing, misery is once again at the highest level of the banking world.

There is a chance that governments and central banks will have to intervene again to prevent worse. Don’t forget that money in the bank is officially no longer yours. Once a bank collapses, you can no longer access that money. That is also what Silicon Valley Bank customers are experiencing right now. Not only inflation, but also this aspect is an important argument for Bitcoin over traditional financial parties.

If you keep your Bitcoin in your own wallet, the entire financial system can collapse, but your Bitcoin will remain in your wallet. It can get very spicy in the coming period, but this is possibly a moment when many people will learn and see how important a decentralized currency like Bitcoin is.

What is going to happen now?

It is difficult to say what exactly we can expect in the coming days to weeks, but action is certain. To prevent Silicon Valley Bank’s woes from spilling over to the rest of the financial system, the US authorities may need to step in. There is a chance that support packages will be introduced and that the banks will have to be kept afloat with art and flying.

In the above tweet from Tradingview you can see the prices of several banks in the United States, all of which are in trouble. Confidence in the financial sector seems to be lost at the moment and many parties are trying to withdraw their assets at the same time.

This could lead to a bank run, which could lead to a very severe and dark recession. What that means for the Bitcoin price in the short term is difficult to say. Probably Bitcoin will not go to the moon because of this, on the contrary. In the long run it can almost only work positively.

After all, people now see again why Bitcoin was once built by Satoshi Nakamoto and this also means that interest rates have to go down again in the long term and the money printers have to turn on again. That is bad for the US dollar and other fiat currencies and good for assets like Bitcoin, which are in absolute scarcity.

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