• The banking crisis in America and Europe has been two-fold, with some people fearing another financial crisis like the one from 2008 while others are finding a “safe haven” status for bitcoin and other digital assets.
• Last month, regulators acquired First Republic Bank and circulated most of its assets and deposits to institutions like JPMorgan Chase, marking the third major bank failure this year.
• Alex Thorn – head of firmwide research at Galaxy – commented that it is unclear whether the banking crisis narrative can continue to be a boon for bitcoin.
The Banking Crisis
The banking crisis in America and Europe has been two-fold in many ways. On the one hand, it’s put a lot of people in a state of fear that another big financial crisis like the one we witnessed 14 or 15 years ago is coming again. At the same time, it can be argued that the current baking crisis has brought about a new “safe haven” status for bitcoin and many of its digital cronies. As a result, we are seeing currencies like bitcoin rise like they never did the previous year, and there are more people backing these assets, supporting them, and investing in them as a means of keeping their wealth stable during this present period of financial and economic strife.
First Republic Bank Has Fallen
Early last month, regulators acquired First Republic Bank and circulated most of its assets and deposits to institutions like JPMorgan Chase. This marks the third major bank failure this year, and it’s making a lot of people think the days of the 2008 Great Recession are on their way back.
What Will Happen To BTC?
Alex Thorn – head of firmwide research at Galaxy – commented in a recent interview: It’s unclear whether the banking crisis narrative can continue to be a boon for bitcoin. Overall, the market lacks clear positive near-term catalysts, with supply issues overhanging bitcoin… Bitcoin accumulation by small addresses is outpacing issuance, and we expect Ethereum staking to increase, each of which provides a supportive supply narrative. Outside of crypto-native factors, we expect a back-of-the-year macro environment to be characterized by tightening, recession, and an expanding multipolarity in the global economy—all of which can be supportive of gold and bitcoin.
Near Term Catalysts
Bitcoin endured a small dip in early May after it was revealed that drama surrounding First Republic Bank reached an all new peak right now; however overall market lacks clear positive near term catalysts with supply issues overhanding Bitcoin such as Bitcoin accumulation by small addresses outpacing issuance while we also expect Ethereum staking to increase which provides supportive supply narrative outside crypto native factors such as macro environment being characterized by tightening recession & expanding multipolarity which could support Gold & BTC prices too.
Bottom Line
The bottom line here is that there’s still uncertainty around how exactly will Bitcoin perform post fall off First Republic Bank but if further banks fail then surely there would be safe haven sentiment towards cryptocurrencies including Bitcoin once again due to decentralized nature & transparency associated with them allowing plenty room for growth & optimism going forward as well!
