Bitcoin Spikes Following Silicon Valley Bankruptcy

Silicon Valley Bank is in the process of filing bankruptcy, bringing back rough memories of the FTX debacle five months ago. However, the effects appear to be the opposite of what they were back in November. During that time, bitcoin and its altcoin cousins fell to new lows, whereas this time around, bitcoin and several of its counterparts appear to be surging like crazy.

Silicon Valley Dips While BTC Rises

At the time of writing, BTC – the world’s number one cryptocurrency by market cap – has shot beyond the $27,000 mark, and there are many analysts out there that seem to believe $30K could be next granted the currency manages to keep up its present patterns. Just over the last few weeks, the currency has risen by more than 30 percent, and many other assets are following in its footsteps.

With bitcoin rising, many crypto-based stocks – such as Coinbase – are also on the rise. America’s largest and most popular digital currency exchange has seen its stock jump by more than nine percent during this time, and the momentum just keeps on picking up as time goes by.

Coinbase’s chief tech officer Balaji Srinivasan says that the current banking crisis being witnessed in the States could lead to a serious case of hyperinflation. He is now telling users to buy as much BTC and crypto as they can before the standard banking industry goes haywire. He said:

The central bank, the banks, and the bank regulators have bankrupted all of us. They hid their insolvency from you, the depositors, and they’re about to print $2 trillion to hyperinflate the dollar. In the digital age, this will happen very quickly, so buy bitcoin now and get your coins off exchanges.

The fall of Silicon Valley Bank is being labeled the biggest collapse since the 2008 financial crisis. The Federal Insurance Deposit Corporation (FDIC) has now had to step in and say that all deposits lost at both Silicon Valley and Signature Bank will be fully backed. Nikolaos Panigirtzoglou explained in a recent note to his clients:

The usage of the Fed’s bank term funding program is likely to be big.

Srinivasan continued his initial statement with:

The entire banking system is lying to you about solvency. They are trying to ensure you don’t exit to bitcoin before they print the money.

Is the Banking System Lying to Us?

Markus Thielen – head of research and strategy at Matrix Port – also threw his two cents into the mix, saying:

Bitcoin benefits from full-blown, government-guaranteed deposit insurance, from inflation falling back to the three percent level, which allows the central bank to become less hawkish, and from regulatory overhang that has impacted stablecoins such as BUSD and, recently, USDC. Bitcoin loves liquidity, and is the primary crypto weapon of choice when those liquidity floodgates are being alternated, such as now.

Tags: banks, bitcoin, Silicon Valley