US FDIC Chair Warns Of Banking Crisis Risk; Will Bitcoin Benefit?
In what could be a sign of the possibility of yet another spell of US banking crisis, the Federal Deposit Insurance Corporation (FDIC) Chair warned of more downside risks from inflation and high interest rates. Earlier in March 2023, the Bitcoin price saw the much needed spike thanks to the fear, uncertainty and doubt around the collapse of Silicon Valley Bank (SVB).
Also Read: BTC Price: Bloomberg Strategist Predicts Key Level For Recovery Strength
Significant Downside Risks For Banking Industry
US FDIC Chair Martin Gruenberg warned that the banking industry remains exposed to significant downside risks from inflation and high interest rates, which could further cause profitability and credit quality to weaken. The US banking sector was rocked by fear and uncertainty in the first quarter as account holders rushed to withdraw funds from their accounts as the bank runs of Silicon Valley Bank and Signature Bank unfolded.
At the same time, the crypto market benefited with BTC price gaining significantly with investors prioritizing riskier assets like Bitcoin over the volatile financial markets. With uninsured account holders leaving banks, deposits declined for the fifth quarter in a row. This had in turn placed a burden on profitability of banks as they chased customers looking for better returns.
Buy Opportunity For Bitcoin?
While the concerns around commercial real sector also grow, the US banking sector could likely be in for yet another crisis going into the fourth quarter. Hence, at the current prices, BTC might be trading with a good buy opportunity.
Also Read: Crypto Companies Get More Time To Comply With UK Regulations
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