Two major banks went under this week, both Silvergate and most recently Silicon Valley Bank (SVB). Many in the Bitcoin (BTC) community are currently highlighting the Bitcoin white paper, as it was created in response to the collapse of the Lehman Brothers in 2008.
The banking drama basically started at the beginning of this year when crypto bank Silvergate ran into financial problems. This week the news came out that all operations will be halted and the bank will go into liquidation. The demise of Silicon Valley Bank is the most recent and has hit the hardest in the global financial system.
Just yesterday you could read in the crypto news that Robert Kiyosaki, the author of the book “Rich Dad, Poor Dad”, believes that it is only a matter of time before a third bank will go under.
Some blame the bankruptcy of the SVB on rising interest rates in the United States. The Federal Reserve raised its interest rate to more than 4.5% last year, the highest rate since 2007. In January, inflation in the US was 6.4%.
Bitcoin in response to financial crisis
In fact, about six weeks after the dramatic collapse of Lehman Brothers – the fourth largest investment bank in the United States at the time – Satoshi Nakamoto released the famous white paper that paved the way for the rise of the Bitcoin network. Confidence in the economy and banks was at an all-time low at the time, and Bitcoin became the first form of money to replace the element of trust with math.
Ryan Selkis, founder and CEO of Messari, said the following about Bitcoin in relation to the problems in the traditional financial system:
“There is a whole generation of builders who only read about Lehman and the financial crisis and mocked Bitcoin. Now their eyes are wide open. Welcome new friends.”