As US banks continue to experience a deposit drop and unprecedented borrowing rates, investors are flocking towards Bitcoin. Within the last two weeks, Bitcoin has rallied by 35%, hitting a high of $27,944. Experts suggest that this increase has been fueled in part by US investors seeking refuge from the devaluing US dollar during times of distress.
According to Markus Thielin, head of research and strategy at Matrixport, “Americans are buying Bitcoin with both hands.” Thielin notes that 47% of the purchases that have led to Bitcoin’s recent price surge have come from US institutional players.
Former CTO of Coinbase, Balaji Srinivasan, predicts that Bitcoin may replace the US dollar as the global reserve currency. He explains that investors typically exit devaluing currencies during times of distress, and the US dollar falls into that category currently.
This trend towards Bitcoin comes as US banks lost $98 billion as deposits dropped and they have borrowed a total of $669.6 billion, the highest rate since the turn of the century. This shift in deposits suggests that customers are moving funds from regional banks to larger banks considered “too big to fail,” highlighting concerns that the government may not aid smaller banks.
The rise of Bitcoin in the midst of banking turmoil indicates a growing trust in decentralized cryptocurrencies as a safe haven asset. As the financial world faces increasing uncertainty, Bitcoin’s resilience and promise of stability continue to attract investors worldwide.