• The banking crisis in America and Europe has caused fear that another financial crisis is coming, resulting in a surge of crypto investments.
• Alex Thorn of Galaxy commented on the effects of the banking crisis on bitcoin, saying it can be supportive for gold and bitcoin.
• Bitcoin and Ether began 2023 at an artificially low price, allowing them to move higher off a low-base effect as the contrast between their decentralized nature became evident.
First Republic Bank’s Collapse
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, leading people to think another Great Recession is on its way.
Effects on Bitcoin
Alex Thorn – head of firmwide research at Galaxy – commented in a recent interview regarding how the banking crisis narrative could affect Bitcoin. He noted that while supply issues are overhanging Bitcoin, small address accumulation is outpacing issuance which acts as a supportive supply narrative.
New “Safe Haven” Status for Cryptocurrencies
The current baking crisis has brought about a new “safe haven” status for Bitcoin and many other digital currencies. As a result, we are seeing currencies like Bitcoin rise like they never did before and more people are backing these assets, investing in them as a means of keeping their wealth stable during this period of economic strife.
Low Base Effect
Bitcoin and Ether started 2023 with an artificially low price which allowed plenty of room to move higher off a low-base effect when the contrast between their decentralized nature became evident due to the widening banking crisis.
The banking crisis has caused fear for many people who worry that another financial crisis is coming again soon. At the same time however it’s created saw new opportunities for crypto investors looking to capitalize on this situation by investing into these digital currencies as they become more popular „safe havens“. Furthermore, with an artificially low base price for Bitcoin and Ether combined with their decentralized nature makes them attractive investments even amidst the widening banking crisis