- Massive withdrawals hit the US banking sector.
- BitMEX’s founder Arthur Hayes believes that Bitcoin may stage another bull run this year.
The recent collapse of the three US banks – Signature Bank, Silicon Valley Bank, and First Republic, and the several predictions of a possible collapse of the banking system have triggered a panic withdrawal among depositors.
This has been confirmed by recent data compiled by the Federal Reserve Economic Data (FRED) system, estimating that about $30 billion was withdrawn from US Bank accounts from May 10th to May 17th. Compared to the previous week, this is $4 billion more than the amount recorded.
A year ago, the US banking system had $18.03 trillion in deposits. Interestingly, this has reduced to $17.15 trillion. Some analysts think that risk assets like Bitcoin (BTC) could be a possible destination for some of these withdrawn funds.
Many stakeholders expect that the situation is reversed as quickly as possible to avoid crashing down the economy. However, BitMEX founder Arthur Hayes thinks the banks are on the brink of another hit. According to him, businesses are seeking to outperform low-interest rates. Unfortunately, high rates exist on the money market funds that invest in the US treasuries. For this reason, investors and businesses looking for a better return would massively withdraw from the banks.
In his submission, Hayes questioned whether businesses and individuals could continue to withdraw money from 0 percent yielding bank accounts to where the yielding is 5 percent or 6 percent. According to him, the US private sector would continue to withdraw until the banks are ready to offer a better rate.
Logic tells us the answer is an obvious and resounding ‘absolutely.’ Why would they not, if all it takes is a few minutes on their smartphones to 10x their interest income? The US private sector will continue to pull money from the US banking system until the banks offer competitive rates that match at least the Fed funds rate.
Arthur Hayes Expects a Bitcoin Bull Run
He further disclosed that the rate hikes could be a catalyst for Bitcoin to stage another bull run. Hayes has observed that the Fed may likely print money to pay interest in the reserve balances. When this happens, beneficial wealthy asset holders would purchase risk assets like Bitcoin, Gold, AI tech stocks, and others.
Looking at the scenario, the BitMEX founder expects a Bitcoin bull run from the late third and fourth quarter of 2023. Not to be left behind, he stated that he would increase his allocation after the US Treasury’s General Account is replenished. More interestingly, Hayes predicted that Bitcoin would not fall back to $20k.
I expect that Bitcoin will hold firm here. I do not believe we will retest $20,000 or come anywhere close. As money slowly trickles into the global risk asset markets, a strong base of support will form. Volatility and trading volumes always disappoint during the northern hemispheric summer months, so I am not surprised that degens plagued by boredom have checked out of crypto trading for the time being. As more and more pundits start talking about what is happening to the billions of dollars printed by the Fed and US Treasury and handed out as interest, it will become common knowledge once more that the money printer is going brrr. And when the printer goes brrr, Bitcoin goes boom!
No spam, no lies, only insights. You can unsubscribe at any time.
Bitcoin has a current bearish sentiment and has fallen by 4 percent in the last seven days to trade at $26,830.82.
Crypto News Flash does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. Crypto News Flash is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Credit: Source link
