$2 Trillion Fed Bazooka Triggers Shock Hyperinflation Warning Amid Soaring Bitcoin, Ethereum and Crypto Prices

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BitcoinBTC, Ethereum and other major cryptocurrencies surged this week amid a banking crisis that could be about to trigger a massive earthquake from the Federal Reserve.

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The price of bitcoin topped $27,000 per bitcoin, up more than 30% since this time last week, hitting a level it hadn’t seen since June of last year. The bitcoin boom has also pushed up the price of ethereum and other major cryptocurrencies.

Now, after JPMorgan analysts said the Fed’s new banking support program could inject up to $2 trillion into the financial system, tech investor and former CoinbaseCOIN CTO Balaji Srinivasan has warned that the latest banking crisis could trigger hyperinflation in the United States and advised people to “buy bitcoin now and remove your coins from exchanges.”

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“Central bank, banks and banking regulators have bankrupted us all,” Srinivasan, who has been credited with calling out the severity of the Covid-19 pandemic outside the health facility, said on Twitter.

“They hid their insolvency from you, depositors. And they’re about to print $2 trillion to hyperinflate the dollar. In the digital age, that’s going to happen very quickly. So buy bitcoin now and withdraw your purse coins.”

Last week, Silicon Valley Bank (SVBVB), a regional bank specializing in lending to startups and tech companies, was shuttered following depositors’ panic over its insolvency. Signature BankSBNY, a cryptocurrency-enabled bank, was also shut down by regulators, a move that may be due to concerns about its anti-money laundering controls.

Former U.S. Representative Barney Frank, co-author of the Dodd-Frank Banking Regulation Act, served on the board of directors of Signature Bank and said he believed the bank was shut down to warn against transactions with crypto companies. “It was just a way of telling people, ‘We don’t want you to deal with crypto,'” Frank told the AP.

Earlier in the week, another crypto-enabled bank, Silvergate, collapsed due to fallout from the shock implosion of major crypto exchange FTX last year.

The SVB collapse was the biggest U.S. bank failure since the 2008 financial crisis and sent shockwaves through the financial system as customers rushed to withdraw cash and authorities tried to restore the trust.

Over the weekend, the US Treasury Department, Federal Reserve and Federal Insurance Deposit Corporation (FDIC) said they would fully support all deposits to both SVB and Signature.

“Use of the Federal Banks Term Funding Program is likely to be significant,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note to clients seen by Bloomberg.

Srinivasan said he was sending a “bitsignal”, offering to donate $1 million in bitcoins, divided by 1,000 Twitter users who respond to his message, to draw attention to the banking crisis and what he is up to. feared is impending hyperinflation.

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“The whole banking system is lying to you about solvency,” Srinivasan said. “They try to make sure you don’t leave bitcoin before they print the money.”

Srinivasan added that “the speed of hyperinflation” can catch “people off guard”.

The Fed’s unprecedented action comes as it continues to battle inflation which hit a 40-year high last year. The Fed raised interest rates at an unprecedented pace in an attempt to stamp out inflation, but also put pressure on banks.

“Bitcoin benefits from fully-fledged government-guaranteed deposit insurance, inflation falling back to the 3% level, allowing the central bank to become less hawkish, and a regulatory overhang that has had a impact on stablecoins such as BUSDBUSD and, recently, USDCUSDC,” Markus Thielen, head of research and strategy at Matrixport, wrote in an emailed note.

“Bitcoin loves liquidity and is the primary crypto weapon of choice when those liquidity valves are alternated like now.”

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