• The recent collapse of two top US banks, Silicon Valley Bank and Signature Bank, has fueled rumors that the fractional reserve banking system is no longer safe for investors.
• Crypto asset prices have surged in the past 24 hours, suggesting that investors are turning to digital assets as a safer option.
• Author Michael Casey suggests that this could be similar to the 2012 Cypriot financial crisis, which triggered a Bitcoin rally in 2013.
Banking Crisis Looms: Is Crypto The Future Of Secure Investing?
Silicon Valley Bank and Signature Bank Collapse
The devastating collapse of two major United States banks, Silicon Valley Bank and Signature Bank, has caused panic among investors who fear their deposits may not be secure in traditional banking systems. This has led to speculation that crypto assets may offer a better alternative for secure investments.
Crypto Assets Experience Price Surge
In response to this news, leading crypto assets such as Bitcoin, Ethereum and BNB have experienced price surges of over 7% in just 24 hours. This suggests that investors are increasingly turning towards digital assets as a more stable option compared to traditional banking systems.
Fractional Reserve Banking System Under Threat?
The fractional reserve banking system requires lenders to maintain only a small portion of deposits available for withdrawal while the rest are lent out to fuel economic activity. With the current situation being closely monitored by economists worldwide, it is feared that higher inflation will follow if bank runs become more common around the world.
Could This Be Similar To The 2012 Cypriot Financial Crisis?
Author Michael Casey believes this situation could be similar to what happened with Cyprus in 2013 when their banks failed which subsequently resulted in an increase in Bitcoin’s value due to people seeing its potential after losing trust in traditional banking systems.
With the U.S CPI data set for release tomorrow, it appears likely that QE will soon resume as suggested by Peter Schiff on Twitter prior to SVB’s failure and amid fears of increased inflation from bank failures worldwide some investors appear ready to turn towards crypto assets instead of traditional banking systems for secure investing opportunities .