Banking crisis broadens to Switzerland, Bitcoin stable, gold rises
Noted Bitcoin basher and Nobel Prize winner in economics Paul Krugman wrote in the New York Times earlier this week that the demise of Silicon Valley Bank cannot be compared to the bankruptcy of Lehman Brothers in 2008. He may regret that title.
The consequences of the collapse of Silicon Valley Bank evoke more and more memories of that time just a few days later, as the global banking giant Credit Suisse now threatens to collapse.
Bitcoin, meanwhile, is holding up well and is increasingly seen as a winner in this turbulent week. Gold maintains its safe haven status and rises.
Although two weeks ago, when the first real problems appeared at Silvergate, everyone declared that this was a problem which would be limited to crypto linked banks, it is now clear that this is a much bigger issue. In Europe, nervousness has skyrocketed since yesterday after it appeared that Credit Suisse might be about to collapse.
It was always sure that European banks would also run into problems and today the focus is on Credit Suisse.
Zaye Capital analyst Naeem Aslam commented.
Last night Credit Suisse was awarded a 54 billion Swiss franc credit line from the Swiss Central Bank. The Swiss government was being pressured by an unnamed European government, probably the Germans or the French, to act fast. We will have to wait and see if this latest move can contain the growing crisis.
Many are now eyeing Christine Lagarde, president of the ECB, which will announce today whether or not the interest rate in the Eurozone will be heightened.
Bitcoin looks very stable
Remarkably enough, Bitcoin turns out to be one of the only investments that is quite stable in the face of all that stock market violence. Together with gold, it is increasingly considered the winner of the current crisis.
#Bitcoin ad on display in front of Silicon Valley Bank HQ. pic.twitter.com/SRNuv84GDf— Watcher.Guru (@WatcherGuru) March 15, 2023
Given that Satoshi Nakamoto designed Bitcoin to serve as an answer to the 2008-2009 financial crisis, this is extremely good news for those holding crypto for the long term.
At the time of writing, Bitcoin is getting traded for a price of $24,700 and has won 13% in the past week.