 | Some may have thought the crisis was over but many didn't even realise that yet another bank collapse. In actuality two of them did. Kansas Heartland Tri-State Bank was the latest to fall and were closed by the FDIC in late July. PacWest technically didn't outright fail but were acquired by Banc of California. PacWest had been in he news for months now and there name was alongside First Republic's even before they collapse and PacWest were well expected to fail as well. It's an open secret the acquisition saved PacWest from going into FDIC receivership. Speaking of which, the FDIC released a reported where the outlined that their list of almost 50 banks they identify as problematic. Banks are also haemorrhaging deposits as deposits are down almost 500 Billion which marks the largest decrease in deposits since data collection began in 1984. Banks are also sitting on 500 Billion in unrealised losses as (new) treasury prices continue rising and the value of the ones they bought prior are falling lower and lower in market value, Moody's cut the ratings of 10 banks by one notch and placed six banking giants, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial on review for potential downgrades. S&P followed suit and also downgraded 5 banks. All that said is to paint a pretty stark picture that the crisis is far from over. The 2008 crisis took years to play out in the US and even a further number of years for it's consequences to play out particularly in the Eurozone. Meanwhile Powell said that he will still raise rates if he sees fit. So here the thing. BlackRock's CEO as well as a number of asset manager had indeed realise information from research that Bitcoin is acting more and more like gold, hence Larry Fink(BlackRock CEO) statements calling Bitcoin digital gold. That is to say, in a time of crisis or uncertainty Bitcoin could actually be seen as a safe haven asset and appreciate in price. The big question is however, has Bitcoin matured enough to reach that point. It may also be given a helping hand as banks are at the centre of traditional finance so when they fail people will be looking for somewhere to put their money. Exchange may also benefit from this . And then there's markets. We will inevitably see some, probably a lot, of coins fall like rock but others that actually have value and are more correlated to Bitcoin may actually appreciate in price if Bitcoin has a pump. But here's the catch. All this depends of how bad the crisis gets. After all, if no (or very little) bank are left standing there won't be much avenues for individuals to get into crypto or get money out to pay for daily expenses on the other side. Perhaps P2P sees are serious boon but that seems pretty unlikely. All this is to say that the next few months are going to be pretty interesting. Both for the global economy as well as how traders react to it buy their buy or selling of crypto when stuff hits the fan. https://www.fdic.gov/news/speeches/2023/spmay3123.html https://www.cnn.com/2023/07/28/business/heartland-tristate-bank-failure/index.html https://www.reuters.com/markets/deals/banc-california-talks-buy-pacwest-bancorp-wsj-2023-07-25/ [link] [comments] |
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