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Banking Issues, Bitcoin Outperforms

by CryptoDataDownload


SVB & Signature Bank Failures
The failure of Silicon Valley Bank (3/10/23) was a little over a week ago, and has lead to a loss of confidence in the global macro markets. However, Bitcoin significantly outperformed by putting in consecutive +8% days as equity markets faltered. Also notable is that this move occurred following the closure of Signature Bank (3/12/23), which was one of the few banks that permitted buying cryptocurrency. This is surely going to get the attention of portfolio managers everywhere. But what is appealing about Bitcoin in the midst of a possible banking or liquidity issue, given that it is such a volatile asset? Historically, the a portfolio managers' answer would be to "move to cash", ie sell out of your positions and move the money into the bank (or US Treasuries). But what if they don't want to hold the $$ at the bank OR take the risk of holding the position?

The appeal of Self Custody
One of the appeals of the Bitcoin asset is the fungibility and storability. If you can memorize a 12 word phrase, you can keep all of your assets in your head. One logical reason someone may want to own Bitcoin in a possible run-on-the-bank situation is: self-custody. If the bank has all your money and is unable to return it, it was not really your money. Or as the phrase goes in crypto, "Not your keys, not your crypto".



Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Author does not own the any crypto currency discussed. The information and content are subject to change without notice. CryptoDataDownload and its affiliates do not provide investment, tax, legal or accounting advice.

This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by CryptoDataDownload is not an endorsement whatsoever. CryptoDataDownload was not compensated to submit this article. Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.
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