Federal Reserve statistics revealed a significant decline in bank deposits between March 8 and March 15.
Between March 8 and March 15, United States bank deposits decreased dramatically due to worries of a financial collapse. In contrast, Bitcoin has gained 35% over the last two weeks.
According to data from the Federal Reserve, deposits at all U.S. commercial banks decreased by $98 billion during that week, while deposits at the 25 largest banks increased by $67 billion. This indicates that clients shifted their cash from regional banks to those deemed too large to fail, indicating a fear of an economic disaster.
This behavior also reinforces that the government may only assist smaller banks if deemed systemically significant. Tyler Winklevoss, a co-founder of Gemini, characterized the U.S. banking system as a modern caste system in which those who bank with the top banks are shielded from danger while the others are exposed to it.
Meanwhile, the government and big banks’ efforts to ease tensions have not entirely answered fears about a future financial system disaster. Several people continue withdrawing cash from local banks, causing them to borrow at an alarming pace to avert bank runs.
CNN stated that tiny U.S. banks’ borrowing hit its most significant level since the turn of the century. This week, according to the data, banks borrowed $669.6 billion. Analysts feel that this is only an attempt by the banks to prepare for a potential bank run and does not necessarily indicate a present issue.
A recent analysis of Bitcoin’s price increase revealed that U.S. investors had a significant role. Markus Thielin, director of research and strategy at Matrixport, claims that Americans are purchasing Bitcoin with both hands. Thielen stated that purchases from U.S. institutional players caused 47% of the BTC price surge.
The former CTO of Coinbase, Balaji Srinivasan, noted that investors often abandon depreciating currencies in times of turmoil. According to him, the U.S. Dollar now fits under this category, and he expects Bitcoin (BTC) will replace it as the global reserve currency.
During the current financial crisis, Bitcoin has increased by 35 percent in the previous two weeks, reaching a high of $27,944. Several BTC bulls have anticipated the impending collapse of the financial system and a possible surge to $1 million for the flagship asset.
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