Bitcoin Could Prosper Amid the US Banking Crisis, Financial Advisor Bernstein Urges

Analysts at Bernstein Private Wealth Manager think the shaking banking system in the United States could benefit bitcoin adoption and potentially increase the price of the asset.

The experts went further, advising people to invest in BTC, which could soon enter a new bull run due to the shaking condition of traditional finance.

Weak Banks Could Pump BTC up

Analysts Gautam Chhugani and Manas Agrawal believe the banking crisis in America could worsen in the future and suggested bitcoin might emerge as a savior. In their view, the numerous bank collapses could push investors away from traditional finance, triggering a mainstream adoption and a new bull run for BTC.

“The safe haven signal will lead to a new crypto cycle, pushing digital wallets as on-chain savings accounts. The gap between Treasury rates and bank deposit rates will continue to hollow out banks, with weak balance sheets leading to another round of mass migration to money markets.” 

Recall that the US authorities shut down Silvergate Capital, Signature Bank, and Silicon Valley Bank (SVB) in March after they disclosed severe liquidity difficulties. 

The concern of a potential contagion in the sector intensified recently after First Republic Bank (one of the top 20 largest financial institutions in the US with over $200 billion of assets under management) saw its shares crashing to record lows. The 55% drop (on a weekly basis) occurred shortly after the entity revealed its disappointing Q1 earnings report.

Bernstein’s analysts also expect the Federal Reserve to launch another money-printing campaign in an attempt to solve the banking problems. They urged investors to purchase bitcoin as this could re-establish the asset’s legacy as digital gold.

“To rescue the ship, the Fed will have to resort to dollar debasement and monetary printing again, bringing back the role of Bitcoin as digital gold.”

BTC’s Rise Amid the Turbulence

Despite the initial shocking moments, the price of the primary cryptocurrency has indeed spiked substantially during the recent banking calamity. It soared to $28,500 a few days after the collapse of SVB and continued its increase in the following month. 

The asset seems inclined to perform well on occasions when traditional finance experience significant issues. After all, it was created during the last massive monetary crisis (in 2008) caused by banks, many of which failed and had to be revived again.