Crypto may experience its first banking crisis and we don't know where this is going.

Some of you may remember the economic crisis beginning in 2008. Lehman Bros. (a huge bank with business in all and also very shady finance sectors) went bankrupt. "Too big to fail" wasn't a narrative anymore and many banks had to be saved from bankrupcy. Governments desperately tried to prevent a domino effect.

Now that Credit Suisse seems to be in trouble, all this is on the menu again:

In a memo to staff on Friday, Chief Executive Ulrich Körner told employees that the bank is at a critical moment before it presents a strategy update outlining plans for the investment bank on Oct. 27. He said not to confuse its stock price performance with its capital strength and liquidity. The memo appeared to spark fresh concerns and spilled into an online frenzy on Twitter and on Reddit investment discussion boards on Saturday and Sunday. [Wallstreet Journal]

This sounds a lot like the predecessor of "Your funds are safe. We just froze withdrawals until we've found a solution".

This is what happened:

In mid-March, shares in ViacomCBS Inc. and Discovery Inc. rocketed skyward. That was great news for Bill Hwang. His firm, Archegos Capital Management, had borrowed billions from Credit Suisse Group AG to make wagers on a handful of stocks, including the entertainment companies. [...] Credit Suisse took a $5.5 billion loss on Archegos. [WSJ #2]

We do not exactly know what we're facing, because theres's simply no precedent setting.

The sentiment on this sub seems to be "bullish for crypto" because Bitcoin and Defi is meant to be a substitute for the rotting banking system. But will it be in the long term? Will this drag us down or will money flow into crypto?

/edit: interesting read. It's Forbes, but a lot of data: Are we in a recession?