Mediaboss Marketing

Its the ugliest banking crisis since 2008

Over the last eight days, three U.S. banks have collapsed.

Last Wednesday, Silvergate Bank which had major ties to crypto said it was shutting its doors. This helped trigger fatal banks runs at Silicon Valley Bank (SVB) and Signature Bank.

And even though the Fed stepped in to guarantee deposits, panic has rippled through the regional banking sector.

The chart below shows the iShares Regional Bank ETF (IAT), which tracks the performance of 37 U.S. regional bank stocks.

Its plunged 43% since the start of the month.

Investors are worried the folks running these banks did the same dumb things their colleagues at SVB and Signature Bank did by taking risks with customer deposits.

And yesterday, shares in the worlds seventh-largest investment bank, Credit Suisse, plunged 24%.

This came after management at the Switzerland-based bank admitted it had found weakness in its financial reporting.

But while banks are buckling, bitcoin has been on a tear.

It soared 20% versus the dollar over the past week. And our crypto expert Teeka Tiwari says it will be a huge beneficiary of this turmoil.

As youll see below, he expects bitcoin to go much higher but hes far from bullish on the broader crypto market. Thats because of an unprecedented crypto panic he sees coming.

Ill get into that in a moment. First, its important to remember bitcoins origin story

January 3, 2009, to be precise.

Thats four months after Lehman Brothers collapsed and the eye of the storm of the global financial crisis.

As youll recall, Wall Street banks loaded up on mortgage debt that went sour. This blew massive holes through their balance sheets. And it led to bank collapses in the U.S. and around the world.

Thats when an anonymous developer called Satoshi Nakamoto released the Genesis Block.

Its the original block, or group of transactions, on the bitcoin blockchain. And Satoshi left a message in its code

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

Its from a headline in the Times of London about the British governments bank bailouts. (The Chancellor of the Exchequer is Britains version of the Treasury Secretary in the U.S.)

Why did Satoshi leave this message in the bitcoin blockchain?

He wanted us to remember the inherent instability of the banking system and present bitcoin as an alternative.

Unlike fiat currencies such as the U.S. dollar, the euro, and the yen, it doesnt rely on a central bank to issue new currency units or referee payments.

Bitcoin also gets rid of the need for commercial banks to look after deposits and facilitate payments.

You can self-custody your bitcoin in a cryptographically secured wallet app on your phone. You can send and receive payments through your wallet, too. Theres no costly and potentially corrupt middleman involved.

This is a radical departure from the way the modern banking system works.

As the folks who banked with SVB and Signature Bank found over the weekend, having money in the bank is not what it sounds like.

Deposits sit on the liability side of a banks balance sheet. If you have $1,000 on deposit in the bank, you have an IOU from the bank for $1,000.

Banks only need to back a fraction of these IOUs with cash. As we saw over the weekend, if too many depositors come for their cash at once, it can trigger a collapse.

While all hell was breaking lose at SVB and Signature Bank, the bitcoin blockchain settled about 600,000 transactions worth about $33 billion.

And in line with its pre-programmed annual inflation rate of 1.8%, it issued 2,037 new bitcoins.

Nobody lost access to their bitcoins Nobody tried to call customer service and couldnt get through And no regulators had to be called in to back anyones bitcoin.

The network chugged along, without a hitch, through the crisis.

First, bitcoin is a relatively new technology. People are used to keeping their money in the bank. Many still dont trust what bitcoins detractors call magic internet money.

Also, cryptocurrency is famous for its bone-crunching volatility.

You may be able to access and spend your bitcoin, but you dont know what it will be worth in dollar terms tomorrow.

Bitcoin reached an all-time high of $67,617 in November 2021. Then it plunged 76% to $15,814 before rising 58% to $24,954.

But as Teeka has been showing his readers, its better than finding your savings have gone up in smoke because your bank did something dumb with your deposits.

As Teeka put it in a video he sent out to his subscribers

Yes, bitcoin is volatile. Yes, you may wake up one morning with bitcoin down 50%, 60%, 70% versus the dollar. But one, you hold it. Nobody can take it from you. And two, you know that, over time, bitcoin always comes back. You dont have that risk of losing all your capital, as you do if you put it in an unstable bank.

This is why bitcoin is blasting higher. And it will go higher from here. Right now, its above $25,000. I see $30,000 as a chip shot from here.

But thats bitcoin, the worlds most trusted cryptocurrency. Teeka warns that this is not the right time to buy into the broad crypto market

And if Teeka is right, it will be a doozy.

He says it will be the biggest crypto panic in the seven years since he first recommended bitcoin to his paid-up subscribers.

Whats going on is so important that Teeka put together a special update to address it.

Its called The Crypto Panic of 2023 and its free to attend next Wednesday, March 22, at 8 p.m. ET.

In this update, Teeka is set to explain exactly what will cause this panic and how you could turn $1,000 into an entire nest egg

So make sure to automatically RSVP.

Regards,

Chris LoweEditor, The Daily Cut

P.S. Youll also get access to a special video update from Teeka about the banking crisis and what it means for crypto. Check it out here.

Read more here:

Bitcoin vs. the Banks - Legacy Research Group