According to The Block on the 31st, analysts at Bernstein published a report suggesting that another financial crash could lead to hyper-bitcoinization. Hyper-Bitcoinization refers to a situation where Bitcoin replaces other currencies and becomes the only key currency.
Analysts led by Gautam Chhugani, referring to the social media frenzy at the time of the Silicon Valley bank collapse, said they had “entered a new world of super-fast information flows and super-fast bank runs.”
In the week ending March 15, $120 billion worth of deposits left provincial banks and more than half went to big banks. The crisis moved to Europe, ending when UBS bought its long-term rival Credit Suisse at a discount on 19 March.
Chuguni explained that banks are dealing with new risks that have “never been estimated before.”
Very quick withdrawals are expected to be further facilitated by the 24×7 (24/7) instant payment system (FedNow), which the Fed will soon implement.
“We are moving towards another defining moment in financial history,” the report said. “If another crash forces the Fed to undermine the ‘real value’ of the dollar, this could be the last path recommended by Bitcoin followers to hyper-bitcoinization,” Chugupani explained.
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