Summary
Banking sector instability could impact the crypto market positively or negatively. Federal Reserve’s Bank Term Funding Program ends soon, leading to uncertainty. NYCB faces challenges but not insolvency yet. Crypto could become a flight-to-safety asset. Bitcoin price rose following bank collapses last year. Next bitcoin halving could also impact prices. Overall, the crypto market may only grow in conditions of stability or growth in traditional finance.
Key Points
1. Last year’s collapse of several banks highlighted bitcoin’s role as an alternative asset existing outside of the traditional banking segment.
2. The Federal Reserve created the Bank Term Funding Program (BTFP) in March 2023, which made funding available to eligible depository institutions to help banks meet the needs of their depositors.
3. Banking sector instability could be bullish for bitcoin, as it can become a “flight-to-safety” asset in uncertain times, potentially leading to increased demand for decentralized crypto assets.