The recent collapse of three major US banks – Silicon Valley Bank, Silvergate Bank and Signature Bank – is causing worrying outflows at local banks. With the Federal Reserve stepping in with a new $2 trillion facility to stop the bleeding and the Swiss central bank coming in with $54 billion to prop up Credit Suisse, comparisons to 2008 are quickly made.
Born in the chaos of 2008
If you have been involved in the Bitcoin industry for a while, then you undoubtedly know that the digital currency was born in the chaos of 2008. In the first block of the Bitcoin blockchain, Satoshi Nakamoto even put a newspaper headline, directly referring to the rescue of banks during the 2008 crisis.
Bitcoin was born to offer people an alternative to that system, in which banks have to be saved from ruin all the time. That crisis also showed us that there are certain banks that are too big to fail, which means that in principle they are always bailed out by the government if they threaten to fail.
In effect, it showed the world just how far Wall Street is in charge and also has governments under its thumb. We are now in a similar situation with the banking crisis and there is a good chance that the money printers will be running at full speed again in the foreseeable future.
In the end, Silicon Valley Bank went under because for years they chose to keep their customers’ assets in “safe” US government bonds. Those government bonds turned out to be not so safe anymore after the Federal Reserve decided in March 2022 that interest rates had to be raised sharply to fight inflation.
Bitcoin as an alternative
The idea of Bitcoin has always been to make financial intermediaries like Silicon Valley Bank obsolete by being a form of money that you can keep completely independently. Bitcoin is an alternative to the centralized model, which continues to fail time and again, endangering the entire economy.
The more people lose confidence in banks and have to look for alternatives, the better it is for Bitcoin. It is not for nothing that Bitcoin is currently coming in at a price of $ 27,400 each. Over the past few days, the digital currency is at a plus of 35.61 percent.
Those are numbers that don’t lie. It is by no means certain that a new bull market will start for Bitcoin from here, but the beginning is definitely there and fundamentally it is heading in the right direction. The underpinnings for Bitcoin may have never been better than they are now and many people are realizing that.