the only way to escape a run on a bank is to withdraw cash from the system.. not many will flee to bitcoin, if it too is burning.. hence why we haven't seen massive bids both when BUSD signalled they were in trouble and now as USDC reportedly say they have 30% of cash reserves tied up in this bank. This is all an attack on bitcoin to erode confidence. Outside of here, where is the confidence stemming from? What you see is all there is.
Discussion
What happens when banks limit cash withdrawals? I mean I’m not sure how feasible it is to withdraw any sizeable amount of cash as things stand anyway.
That’s the part where people get scared, for normies physical cash is money and people aren’t ready to let cash go.
Too right, you should be scared to let go of cash.. we're not there yet with bitcoin system, and we don't want cbdc's. I posted an article from Arthur Hayes.. brilliant idea.. give it a read.
Governments are slow and inefficient. I detest the idea of CBDC’s as much as anyone, but I can’t see CBDC’s being introduced as a result of these near term bank failures because governments are inept at the best of times. I’m not saying we’re there with a bitcoin system either, I’m saying bitcoin could become one of the only viable exists from the banking system in the short term as a store of value
I agree, only if enough capital flows into the space. Right, now capital is exiting from the space because there is so much uncertainty around whether or not at a future point time there will be more or less friction... Need the banking system for the fiat on ramps.
People aren’t going to give a fuck about “the space” when it’s a case of either preserving their wealth or losing it
Yes I tend to agree with you. CBDCs come in economic meltdown, not a bank run.
But restricting cash withdrawals in the short term will scare people, that’s just extra volatility in an already highly volatile environment.
If they don’t have the reserves to meet withdrawals what choice do they have?
Yes agreed, I think that will happen too as it’s the only lever the government has to try and stabilise the situation, but there will be a situation to stabilise before they do that… so it’s going to be a clusterfuck of “good for bitcoin” 🤣
SVB has been contained - it's a crypto and VC bank.. Fed wants job losses. Let the job loses commence.
Then your fucked isn't it.. Everyone is... Everything grinds to a halt. But we aren't there yet are we... It's that bank and it's customers that have deposits that aren't insured up shits creak as they have to wait for the liquidators to sell assets, which will then be used to pay creditors back in order of seniority. Meaning some people will get back everything where these is a first charge, others might not. Though if they wait 3 years or more, most people will get back there money (so long as they don't sell down there loan books at a lost).