Those tokens would fund a “special grants” program meant to foster growth on Arbitrum, the Ethereum layer 2 that airdropped its governance token ARB just last week. But ARB holders would not get a say in who or how Arbitrum Foundation allocates the nearly $1 billion sum, according to the proposal, AIP-1.
Bitcoin has recently been rising in the midst of widespread banking sector issues, prompted by Silicon Valley Bank.
But bank runs have been a recurring issue throughout history, causing significant damage to the economy.
The collapse of major banks and the panic that followed during the Great Depression of the 1930s led to the creation of regulatory bodies such as the Federal Deposit Insurance Corporation (FDIC) to prevent future crises.
While the banking industry has evolved significantly since then, with the rise of online banks and fintech companies, the potential for crises still exists. Recent events show this risk is very real, prompting many to look to Bitcoin as a solution to avoiding banking crises.
In this article, we will explore the history of bank runs, their impact on the economy, and the measures taken to prevent them. We will examine examples of bank runs throughout history, including the Savings and Loan Crisis of the 1980s and the 2008 Financial Crisis.
Additionally, we will discuss the rise of alternative banking methods such as online banks and fintech companies, and the potential for future crises in the face of economic uncertainty.
Finally, we will examine the role of Bitcoin as a decentralized, borderless alternative to traditional banking methods, and its potential in preventing future bank runs.
The Great Depression of the 1930s is one of the most significant events in the history of bank runs.
The stock market crash of 1929 triggered a wave of panic and uncertainty, leading to the collapse of many major banks.
People rushed to withdraw their savings from banks, fearing that their deposits would be lost forever.
As banks struggled to meet the demands of customers, many failed to provide their promised payouts.
This further fueled panic, causing people to withdraw their money from other banks as well. This vicious cycle created a domino effect, with banks failing one after another.
Customers who were not able to withdraw their money from these banks were left with no savings or financial security.
The Great Depression prompted the U.S. government to intervene in the banking system.
In 1933, the Federal Deposit Insurance Corporation (FDIC) was created to insure bank deposits and prevent future bank runs.
This guaranteed customers that their deposits would be safe up to a certain amount, restoring their confidence in the banking system.
The FDIC’s creation was a significant turning point in the history of bank runs. It created a safety net for customers, ensuring that they would not lose their savings even if a bank were to fail.
This provided the public with much-needed reassurance, stabilizing the banking system and preventing future runs.
The 20th century saw the rise of electronic transfers and the advent of modern banking.
While bank runs continued to occur, they took on a different form in the face of technological advancements.
Here are some examples of bank runs in the 20th century and how they differed from those in the past.
The rise of electronic transfers made it easier for customers to move their money around. While this made banking more convenient, it also made it easier for bank runs to occur.
For example, in 1996, rumors of financial instability led to a bank run on Britain’s oldest building society, the Bradford & Bingley. Customers were able to withdraw their savings quickly and easily, contributing to the bank’s eventual collapse.
The Savings and Loan Crisis of the 1980s was a significant event in the history of bank runs. Over 1,000 banks failed during this crisis, causing panic and leading to a wave of bank runs.
The crisis was caused by a combination of factors, including high interest rates, risky investments, and deregulation of the banking industry.
This crisis prompted the government to step in and create the Resolution Trust Corporation (RTC) to manage the assets of failed banks.
The 2008 financial crisis was another major event in the history of bank runs.
The collapse of Lehman Brothers triggered a wave of panic, causing people to withdraw their savings from banks. This led to a freeze in lending, contributing to a global economic recession.
The government’s response to the crisis was to bail out failing banks and implement new regulations to prevent future crises.
The 21st century has seen the rise of alternative banking methods, such as online banks and fintech companies.
While these innovations have brought many benefits, they have also created new challenges for the banking industry.
Here are some examples of bank runs in the 21st century and how they have been impacted by technological advancements.
The rise of online banks and fintech companies has made banking more convenient than ever before. Customers can easily access their accounts and transfer money using their smartphones.
However, these innovations have also created new challenges for the banking industry.
For example, in 2018, rumors of financial instability led to a bank run on online lender, Tandem Bank. Customers were able to withdraw their money quickly and easily, causing panic and leading to a temporary freeze on withdrawals.
The COVID-19 pandemic had a significant impact on the banking industry, causing widespread economic uncertainty and leading to a wave of bank runs.
In the early days of the pandemic, people rushed to withdraw their savings from banks, fearing that the financial system would collapse.
This led to a shortage of cash and a freeze on lending, contributing to the economic downturn.
Silicon Valley Bank, a prominent US-based bank that specializes in providing financial services to the technology and innovation sectors, recently experienced a bank run.
In response to rising instability concerns, some of Silicon Valley Bank’s customers reportedly began withdrawing their deposits en masse, leading to a liquidity crunch for the bank.
While the banking industry has become more secure and stable since the Great Depression, the potential for future bank runs still exists.
Economic uncertainty, technological advancements, and other factors can all contribute to the likelihood of bank runs.
BTC priced in Silicon Valley Bank shares | BTCUSD on TradingView.com
Bitcoin, the world’s first decentralized cryptocurrency, is becoming an increasingly popular alternative to traditional banking methods.
As the financial system continues to face potential crises, more and more people are turning to Bitcoin as a way to avoid the risk of bank runs and other financial disruptions.
Bitcoin was created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto.
The first Bitcoin transaction took place in January 2009, when Nakamoto sent 10 Bitcoins to a developer named Hal Finney. The genesis block of the Bitcoin blockchain includes a headline from the UK newspaper The Times, reading “Chancellor on brink of second bailout for banks.”
This headline is believed to be a commentary on the instability of the banking system and the need for a new, decentralized solution.
Bitcoin offers several advantages over traditional banking methods in times of crisis.
Firstly, it is decentralized, meaning that it is not controlled by any central authority or institution. This makes it less vulnerable to government intervention and economic instability.
Secondly, Bitcoin transactions are fast, secure, and can be done anonymously, making it an attractive option for those who wish to protect their financial privacy.
Finally, Bitcoin is a borderless currency, meaning that it can be used by anyone, anywhere in the world, without the need for intermediaries or government regulations.
Bitcoin is increasingly being seen as a way to prevent bank runs and other financial crises.
With Bitcoin, individuals can hold their own assets, rather than relying on a bank to hold their deposits.
This reduces the risk of a bank run, as individuals can withdraw their assets at any time, without the need for a central authority to approve the transaction.
This decentralization also means that the financial system is less vulnerable to economic downturns or government interventions, as Bitcoin operates independently of these factors.
Bank runs have been a recurring issue throughout history, causing significant damage to the economy.
The Great Depression of the 1930s marked the birth of bank runs and led to the creation of the Federal Deposit Insurance Corporation (FDIC), a turning point in the history of bank runs.
The 20th century saw the rise of electronic transfers and the advent of modern banking, leading to new challenges for the banking industry.
The 21st century has brought even more changes, with the rise of online banks and fintech companies, as well as the potential for crises like the COVID-19 pandemic.
As the banking industry continues to unravel, it is likely that Bitcoin and other cryptocurrencies will play an increasingly important role in the financial landscape.
By learning from the history of bank runs and adapting to new challenges, including the potential for decentralized cryptocurrencies like Bitcoin, we can work towards a more stable and secure financial future.
First, why did the inflation hedge thesis lose credibility? Well, people saw inflation rising rapidly in late 2021 and early 2022, just as bitcoin’s price quickly fell. Ergo, bitcoin wasn’t an inflation hedge. Many critics of Bitcoin enjoyed carping about this, and the tl;dr of all of their articles and interviews was “I told you so.” But some bitcoiners, such as Steven Lubka, held to their conviction. We were experiencing price inflation due to systemic supply chain shocks caused by various factors, particularly the world reopening following COVID-19. There was no monetary inflation, and so, the idea that bitcoin could act as a lifeboat amid the devaluing of the U.S. dollar could still hold true.
XRP, the cryptocurrency of the Ripple network, has experienced significant price growth in recent weeks, registering an increase of 14% in the last week alone. This marks an appreciation of over 40% for the asset in the last 30 days, positioning it as the cryptocurrency that has seen the highest increase in price across the entire market in the last seven days.
According to the CoinMarketCap, XRP rose from $0.44 to $0.54 during this period, partly driven by increased trading on South Korean cryptocurrency exchanges, particularly Korbit and Bithumb, where XRP was the most traded crypto asset on the platforms in the last 24 hours. This positive trend has been linked to increased confidence from investors amid the backdrop of the current lawsuit with the SEC.
Related Reading: XRP Price Climbs 13% Following Settlement Rumors With SEC
The U.S. Securities and Exchange Commission (SEC) has been embroiled in a legal battle with Ripple for over two years over whether XRP constitutes as an “unregistered security.” If XRP is accepted as a commodity, it could potentially undermine the SEC’s case against Ripple.
Market specialist and TV host Jim Cramer noted the potential implications of XRP’s classification as a commodity, stating that the SEC could lose the lawsuit it launched against Ripple more than two years ago.
However, the optimism in the market for XRP was short-lived, as the cryptocurrency’s rally stalled shortly after Cramer’s comments. This prompted comments on social media that Ripple will not win the SEC lawsuit as his predictions often fail to come to pass.
Related Reading: XRP Profit Taking At Highest Since Aug. 2021 As Price Rises Another 17%
While XRP has seen impressive growth in recent weeks, it’s important to note that the cryptocurrency market as a whole remains highly volatile and susceptible to fluctuations. It is important to exercise caution and carefully consider the potential implications of various factors, including the ongoing legal battle between Ripple and the SEC.
Nonetheless, XRP’s recent performance is a notable development within the cryptocurrency market. It will be interesting to see how it continues to perform in the coming weeks and months.
The cryptocurrency market has witnessed a continuous battle for dominance among the top digital currencies. Ripple (XRP), which was once considered an underdog in the crypto space, has emerged as a serious contender to Ethereum’s position as the second-largest cryptocurrency.
XRP’s market capitalization is hovering around $100 billion at the time of writing, while Ethereum’s market cap is around $300 billion. There’s a growing expectation that a positive verdict could see a steep climb in the market cap of Ripple.
XRP is currently trading at $0.5094, with the token down 4.94% in the past 24 hours. This slight correction is in response to the overall crypto market, which is currently in the red zone. The next resistance level is $0.55, while support levels are $0.45 and $0.40, respectively.
Please note: Content is educational and should not be considered investment advice. Featured Image from Unsplash, Charts from TradingView
Consider also the types of people and institutions the crypto community encompasses: retail and institutional traders, celebrity venture capitalists, nerdy computer scientists, financial engineers, impassioned human-rights activists, musicians, artists, United Nations agencies, Ukraine war effort supporters, pacifists, Austrian economists, supply-chain managers, accountants. The list goes on.
After recovering its bullish momentum, the largest cryptocurrency in the market, Bitcoin (BTC), briefly broke above its key resistance level of $28,700. However, the cryptocurrency retracted and returned to trading within its range formed in the last week between $27,600 and $28,500.
Despite this choppy price action, a recent blog post by Justin Bennett, trader and analyst of the crypto market suggests that BTC has established “strong” horizontal levels, which are favorable for both scalpers and investors who prefer this period of range or consolidation in the market.
Bennett further mentions that Bitcoin trades above the $28,130 pivot point on an hourly and 4-hour closing basis. Any attempt to retest this level will likely attract sellers, potentially triggering another run at the $27,650 support floor and potentially lower prices.
Although the horizontal levels seen in the chart may provide opportunities for scalping, Bennett cautions that there is a potential downside risk if BTC’s support levels are breached.
Bennett suggests that while BTC’s price has no confirmed direction, there are currently more long liquidations below the price than short liquidations above. This means that a higher number of traders have taken long positions and may be at risk of liquidation if the price further declines over the weekend.
However, with Bitcoin trading above the key pivot point, there is still potential for further upside and consolidation above the $29,000 level. The $28,900 macro resistance level is the next target for BTC, and a successful breach could lead to further gains for the largest cryptocurrency in the market.
Bennett further suggests that the primary range for Bitcoin is between $26,500 support and the $28,900 resistance wall, with smaller ranges within this range. This can result in the price movement may be relatively stable within this range. Still, there is a potential for significant volatility if the price breaks out of this range and experiences a correction toward the support level.
According to Rekt Capital, with the closure of Q1 for Bitcoin and the broader cryptocurrency market, BTC is on the verge of confirming its first bullish quarterly engulfing candle since early 2020. This pattern occurs when the opening price of a particular quarter is lower than the closing price of the previous quarter.
According to Rekt, this pattern has historically preceded multiple quarters of upside for Bitcoin, meaning that BTC’s price tends to increase for several quarters after the pattern is confirmed, like in the bull market of 2021.
Even if Bitcoin’s price experiences a pullback in the near term, the sentiment of the cryptocurrency market seems to aim for one thing: BTC is poised for a new bull run.
The market is expected to undergo a sustained period of price increases in the coming months, with the first quarter closing above key levels. This suggests strong potential for growth and investor confidence despite short-term fluctuations in Bitcoin’s price action.
Featured image from Unsplash, chart from TradingView.com
The move comes as bitcoin miners have gone through a difficult year, with bitcoin prices sinking and higher energy prices driving up costs, which weighed on their profit margins. Marathon’s stock price has fallen about 71% in last 12 months, while bitcoin fell about 40%, according to TradingView data.
