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The Silicon Valley Bank collapse on March 10 has sparked fear, uncertainty and doubt (FUD) across the crypto community, leading many to return to crypto roots — reviving the Bitcoin white paper published just weeks after the Lehman Brothers meltdown in 2008.
“There’s an entire generation of builders who only read about Lehman and the financial crisis and scoffed at Bitcoin. But what we’re seeing now is that people are starting to take it seriously as a store of value and as a way to transfer value.”
This event has brought the crypto community together, rallying around Bitcoin and other digital assets in an effort to create a more resilient financial system.
Six weeks after the collapse of Lehman Brothers, Satoshi Nakamoto released the white paper that started the Bitcoin revolution. The dramatic collapse of the fourth-largest investment bank in the United States is believed to have been a major contributing factor to the rise of Bitcoin.
The Federal Reserve had been increasing its benchmark rate over the past year, reaching more than 4.5% by January — the highest rate since 2007. In that month, the inflation rate in the U.S. was also on the rise.
Many crypto and tech companies are affected by the collapse of Silicon Valley Bank. SVB, a Federal Deposit Insurance Corporation-insured bank, was about to shut down operations when USD Coin USDC tickers down $0.96 issuer Circle initiated a wire transfer to remove its funds. Circle revealed it could not withdraw $3.3 billion of its $40 billion reserves from SVB, leading to a sell-off and the stablecoin’s price dropping below its $1 peg. This caused a domino effect on the crypto market, with Bitcoin and other cryptocurrencies also dropping in price.