The traditional banking sector is somewhat panicked and thrown off balance on account of the recent banking crisis. On this account, Credit Suisse is suspected to be the next chain that may break in the series of terrible banking crashes.
The main reason for these speculations is that the share of this bank has plummeted by 25% during the last 24 hours. However, the investors of the bank are still holding out.
Saudi National Bank which is the largest stakeholder of Credit Suisse has announced that it is planning to pump more capital into this bank. There are no signs of panic or massive withdrawals from the bank stakeholders thus far.
UPI reports have informed that the fall in the stock prices of this bank was sudden and unprecedented. Therefore, it caused a raft in the Swiss Markets that was extended to the cryptocurrency markets.
Credit Suisse faced these issues under the context of other banks falling and its consumers starting to take out large sums of money. Meanwhile, the bank was also facing margin calls on account of the devaluation of the clients falling into defaults.
These situations stemmed from the banking demise were related to regional banks namely SVB and Signature Bank. There are still speculations in the market about the involvement of government agencies in the bank runs.
However, the Biden administration has stepped forward to offer bail-out for the users by offering them a full return of their deposits. Since this is not a typical government bailout the stockholders of the fallen banks have to deal with reducing their equity to zero as per the treasury secretary.
While the announcement of interest hikes by the Fed caused a dip in Bitcoin prices, the bail-out has propped its price positions once again.
Bitcoin Appears as an Alternative to Traditional Banking
Bitcoin was created as a response to the 2008 financial crisis. During the recent environment, Bitcoin has once again taken root as the top investment that is used as a shield against traditional banking failures.
Google Trends have revealed that recently the searches about Bitcoin have gone up increasing too considerable proportions.
On the other hand, the global search ratio for Bitcoin banks has also increased by a leap in the last 7 days. On this account, Bitcoin prices have reached a new high of $25K which has the potential to restart a new bullish rally once again.
Meanwhile, the bail-out offer by the government has proved that the Bitcoin market is here to stay and has the potential to make profits. There are some advocates like Robert Kiyosaki who have also advised people to invest in silver, gold, bonds, and Bitcoin during these economic strenuous periods.