Cryptocurrencies to the rescue?
The recent fallout of the Silicon Valley Bank on 10 March 2023 has left the world in FUD – fear, uncertainty, and doubt – as the situation assimilates to the collapse of Lehman Brothers due to the financial crisis of 2008 in the United States.
After the shocking crash of Lehman Brothers, the fourth largest investment bank in the U.S., Bitcoin was successfully and officially launched by publishing its whitepaper. Satoshi Nakamoto, the founder of Bitcoin, described it as a “purely peer-to-peer version of electronic cash.”
It is understood by the crypto community that Bitcoin was created as a way to avoid financial institutions and to decrease the chances of people getting financially hurt by another financial crisis. Some crypto enthusiasts have raised their voices on Twitter following the crash of the Silicon Valley Bank.
The founder and CEO of Messari, Ryan Selkis, has also given his opinion on the matter by accusing people of not getting fully educated about the situation.
Others believe that the rising interest rates in the United States are the sole reason the Silicon Valley Bank collapsed. This year’s rates in the U.S. have increased by over 4.5%, becoming the highest rate since 2007, while the inflation rate in January 2023 was around 6.4%.
The collapse of the Silicon Valley Bank affected many crypto and tech companies and stablecoins. The Circle, $USDC issuer, announced they could not withdraw $3.3 billion of its $40 billion reserve from the now-dead bank. The $USDC decreased significantly by dropping to $0.87, way below its $1 peg.
Now, people are questioning whether or not to keep money in the bank or crypto, and there is no correct answer whatsoever. The truth is that the crypto market is volatile, so keeping a reserve of $BTC or $ETH might not be the best idea. On that same note, storing money in stablecoins might be the smarter move for crypto. However, there are no guarantees in today’s economy.
Sources: www.coindesk.com, cointelegraph.com,
analyst opinion
Eduardo Castro
After the shocking crash of Lehman Brothers, the fourth largest investment bank in the U.S., Bitcoin was successfully and officially launched by publishing its whitepaper. Satoshi Nakamoto, the founder of Bitcoin, described it as a “purely peer-to-peer version of electronic cash.”
It is understood by the crypto community that Bitcoin was created as a way to avoid financial institutions and to decrease the chances of people getting financially hurt by another financial crisis. Some crypto enthusiasts have raised their voices on Twitter following the crash of the Silicon Valley Bank.
The founder and CEO of Messari, Ryan Selkis, has also given his opinion on the matter by accusing people of not getting fully educated about the situation.
Others believe that the rising interest rates in the United States are the sole reason the Silicon Valley Bank collapsed. This year’s rates in the U.S. have increased by over 4.5%, becoming the highest rate since 2007, while the inflation rate in January 2023 was around 6.4%.
The collapse of the Silicon Valley Bank affected many crypto and tech companies and stablecoins. The Circle, $USDC issuer, announced they could not withdraw $3.3 billion of its $40 billion reserve from the now-dead bank. The $USDC decreased significantly by dropping to $0.87, way below its $1 peg.
Now, people are questioning whether or not to keep money in the bank or crypto, and there is no correct answer whatsoever. The truth is that the crypto market is volatile, so keeping a reserve of $BTC or $ETH might not be the best idea. On that same note, storing money in stablecoins might be the smarter move for crypto. However, there are no guarantees in today’s economy.
Sources: www.coindesk.com, cointelegraph.com,
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