While Signature’s Barney Frank referred to the recent events with SVB as an “anti-crypto message,” Trezor’s Josef Tětek said they are “definitely good” for Bitcoin. The ongoing crisis of banks in the United States has many positive implications for Bitcoin (BTC), according to an executive at the hardware wallet firm Trezor. On March 14, Bitcoin […]
While Signature’s Barney Frank referred to the recent events with SVB as an “anti-crypto message,” Trezor’s Josef Tětek said they are “definitely good” for Bitcoin.
The ongoing crisis of banks in the United States has many positive implications for Bitcoin (BTC), according to an executive at the hardware wallet firm Trezor.
On March 14, Bitcoin broke $26,000, a price level not seen since June 2022, posting the biggest gains this year so far. The multi-month high followed a series of shocking events in the U.S. banking industry, with banks such as Silicon Valley Bank (SVB), Silvergate and Signature shutting down operations.
According to Trezor Bitcoin analyst Josef Tětek, the current sharp rise of Bitcoin’s price — which is the fastest rise in price so far in 2023 — appears to be a direct result of the “apparent fragility of the banking system.”
Tětek said that the current banking crisis could potentially make Bitcoin emerge as a safe haven and risk-off asset. He emphasized that Bitcoin was created soon after the world encountered the financial crisis of 2008 and was “likely a response to the unfairness of bailouts.”
“The current events are a timely reminder of why we need Bitcoin,” Tětek said, adding that the current events are not so good for many crypto businesses and assets that are centralized, referring to Circle’s USD Coin (USDC). The analyst stated:
“The current demise of certain banks is definitely good for Bitcoin as such, but not a good environment for custodians of any kind, and once again we reiterate that one the safest environments is to self-custody assets.”
According to Tětek, the recent events with Silvergate and SVB clearly show that counterparty risk in the banking system is a “serious problem,” though it is sometimes well hidden. He added:
“Banks no longer actually hold our money, but lend it out and buy volatile assets with it. Depositors are, in fact, the banks’ creditors. Understandably, people are looking for alternatives such as Bitcoin.”
Tětek also suggested that Silvergate’s collapse was a “direct result of its business relationship” with the bankrupt crypto exchange FTX, while SVB’s collapse was a result of “poor risk management.” He went on to say that SVB had a large exposure to long-term treasuries, which tanked in price as a result of the abrupt interest rate hikes, while the bank failed to have hedges in place. “SVB had little connection to the crypto industry,” Tětek added.
Related: SVB crisis: Here are the crypto firms denying exposure to troubled US banks
Tětek’s remarks come amid Signature Bank board member and former U.S. Congressperson Barney Frank arguing that the latest U.S. banking events are connected to crypto.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank stated, claiming that issues at Signature were “purely contagion from SVB.”