coinpedia.org
The ongoing banking crisis has induced a lot of uncertainty in the financial markets around the world. The signs of a market recession continue to pop from the developed markets, including the United States. With the fear of more bank runs, confidence in Bitcoin, among other risky assets, has significantly spiked in the recent past.
Moreover, Bitcoin price has printed its largest weekly gain amidst the banking crisis. Additionally, United States federal officials are exploring ways to allow the FDIC to temporarily insure deposits beyond the current $250,000 cap on most accounts without having to get approval from Congress.
The U.S. banking system is currently insolvent thanks to the Fed and FDIC. Banks where much sounder under a gold standard and prior to the FDIC. $18 trillion in deposits "insured" by $100 billion in Treasuries. The value of all bank deposits will soon be destroyed by inflation.
— Peter Schiff (@PeterSchiff) March 21, 2023
With the risk of hyperinflation similar to Venezuela, Sri Lanka, and Argentina, among other nations, the value of Bitcoin is expected to skyrocket in the coming years. Furthermore, mainstream adoption is expected to kickstart the next parabolic crypto bull run.
Uncertainty from the Elite
The Fed monetary policy statement on interest rates is expected to be released tomorrow, as economists argue whether the Fed should pause or drop the rate to bolster the financial crisis. Accor to billionaire Bill Ackman, the Fed should pause the interest rate hikes or decline during tomorrow’s FOMC statement.
“I continue to believe that the best course of action is a temporary FDIC deposit guarantee until an updated insurance regime is introduced, for if bank number five is closed, the market’s attention will move to banks six, seven, and eight,” Ackman noted.
His argument was, however, countered by Peter Schiff, who noted a pause would be catastrophic for the dollar.
A pause will send the dollar tanking and inflation soaring to new highs. If the Fed tried to aggressively raise rates to contain inflation, the financial crisis that would ensue would be far worse than the one the pause was meant to prevent. Better to swallow the medicine now.
— Peter Schiff (@PeterSchiff) March 21, 2023
As such, Elon Musk noted that the Fed should drop the interest rate by at least 50 bps to save the economy.
Fed needs to drop the rate by at least 50bps on Wednesday
— Elon Musk (@elonmusk) March 21, 2023