Bitcoin Could Thrive Amid US Banking Crisis, Financial Advisor Bernstein Urges

[ad_1]

Analysts at Bernstein Private Wealth Manager believe that the jolts to the banking system in the United States could benefit bitcoin adoption and potentially boost the price of the asset.

Experts went further, advising people to invest in BTC, which could soon enter a new bull run due to the shaken state of traditional finance.

Weak banks could push BTC higher

Analysts Gautam Chhugani and Manas Agrawal believe that the banking crisis in America may worsen in the future and have suggested that bitcoin could become a lifesaver. According to them, the numerous bank meltdowns could drive investors away from traditional finance, triggering widespread adoption and a new bull run for BTC.

The safe haven signal will lead to a new crypto cycle, pushing digital wallets as on-chain savings accounts. The spread between Treasury rates and bank deposit rates will continue to crowd out banks, with weak balance sheets driving another wave of massive migration to money markets.

Recall that the US authorities closed Silvergate Capital, Signature Bank and Silicon Valley Bank (SVB) in March after revealing serious liquidity difficulties.

Concern of potential contagion in the sector intensified recently after First Republic Bank (one of the 20 largest financial institutions in the United States with more than $200 billion in assets under management) saw its shares plummet to record lows. The 55% drop (on a weekly basis) came shortly after the entity revealed its disappointing first quarter earnings report.

Bernstein analysts also expect the Federal Reserve to launch another bill-printing campaign in an attempt to address the banking problems. They urged investors to buy bitcoin as it could reinstate the assets’ legacy as digital gold.

To save the ship, the Fed will again have to resort to dollar depreciation and money printing, bringing back Bitcoin’s role as digital gold.

BTCs rise amid turbulence

Despite the shocking first moments, the price of the main cryptocurrency has indeed increased significantly during the recent banking calamity. It spiked to $28,500 within days of SVB’s collapse and continued higher the following month.

The asset seems inclined to perform well when traditional finance experiences significant problems. After all, it was created during the last massive currency crisis (in 2008) caused by banks, many of which failed and had to be revived.

[ad_2]