Worse Than 2008Bitcoin and Crypto Now Poised for $540 Billion Crisis, Ethereum Co-Founder Warns

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BitcoinBTC, Ethereum and cryptocurrencies have been catapulted back into the limelight this year by the US regional banking crisis which may be just beginning.

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The price of bitcoin has nearly doubled since dropping to around $15,000 per bitcoin late last year, with Ethereum, the second-largest cryptocurrency, climbing with it despite co-founder Vitalik Buterin launching a serious bull run warning.

Now another Ethereum co-founder, Charles Hoskinson, who later created Ethereum rival Cardano, has warned that the banking crisis is going to be worse than the 2008 global financial crisis that led to the creation of Bitcoin.

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MORE FROM FORBES’Doomsday Scenario’-JPMorgan Sees US Banking Crisis As Bitcoin Boost After $300 Billion Ethereum And Crypto Price SurgeBy Billy Bambrough The 2008 Global Financial Crisis That Led Mysterious Satoshi Nakamoto created bitcoin, followed by other cryptocurrencies such as Ethereum.Getty Images

“In 2008, we had $373 billion in tied up assets,” Hoskinson, who created Ethereum with Buterin, Joe Lubin and five others in 2014, told Fox Business. CardanoADA, which Hoskinson created in 2016, has become the world’s seventh-largest cryptocurrency with a market capitalization of $13 billion, compared to Bitcoin’s $566 billion and Ethereum’s $232 billion.

“I think there was over $540 billion now just in the crisis of 2023. We were just getting started. This whole business model falls apart when you give it a little push and then you lose these institutions like Silicon Valley Bank and they get so politicized and they get so globalized.”

This week, nearly two months after the collapse of Silicon Valley Bank, regulators seized First Republic BankFRC and sold its assets to JPMorgan, the largest US bank by assets.

“What’s going to happen is too big to fail is just going to lead to bigger institutions,” Hoskinson said. “We saw this story in 2008. And this is the rerun. I don’t think anyone wants to watch it.”

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MORE FROM FORBES’A New Market Regime’ – The Fed May Have Just Triggered a $100 Billion Bitcoin Price Surge as Ethereum ReboundsBy Billy Bambrough the recent rally but has so far this year rebounded with the price of bitcoin and the broader crypto market.Forbes Digital Assets

Others have meanwhile warned that the banking crisis could spiral out of control if confidence in the system is restored.

“Trust in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to falter,” said Bill Ackman, managing director of the new-founded hedge fund. Yorker Pershing Square, on Twitter.

“We are running out of time to fix this problem. How many unnecessary bank failures do we still need to watch out for before the FDIC [Federal Deposit Insurance corporation], and is our government waking up? We need a system-wide deposit guarantee scheme now.”

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I am a journalist with significant experience covering technology, finance, economics and business worldwide. As founding editor of Verdict.co.uk, I reported on how technology is changing business, political trends and the latest cultures and lifestyles. I have covered the rise of bitcoin and cryptocurrency since 2012 and traced its emergence as a niche technology in the greatest threat to the established financial system the world has ever seen and new technology the more important since the Internet itself. I’ve worked and written for CityAM, the Financial Times, and the New Statesman, among others. Follow me on Twitter @billybambrough or email me at billyATbillybambrough.com. Disclosure: I occasionally hold a small amount of bitcoin and other cryptocurrencies.

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