Bitcoin price is currently soaring, climbing more than 20% since last Friday. The rally could be due to a brand new bull narrative that’s possibly brewing: using BTC to beat bank runs – a situation unfolding across the United States currently.
Here is what this could mean for the number one cryptocurrency by market cap.
Beating The Banking Crisis With BTC
Late last week, it was revealed that Silicon Valley Bank had effectively failed and depositors might be unable to withdraw their money. It is the second-largest US bank failure in history. What’s worse, is that it almost caused a widespread panic and run on banks.
A bank run happens when depositors fear insolvency and rush to withdraw money. Because banks keep barely a fraction of customer deposits on-hand for withdrawal, when a large amount of customers try to withdraw all at once, the bank can fail.
Chillingly, the string of bank runs comes just days following the 90-year anniversary of Proclamation 2039, when FDR announced a week-long bank holiday to put an abrupt stop to bank runs across the country.
Overnight, the US government announced a plan to make all depositors whole and restore faith in the US banking system. Otherwise, the bank runs could spread. However, the run on banks has started to spread in another way: by creating a new bullish narrative for Bitcoin.
Meet Your Brand-New Bullish Bitcoin Narrative
Narratives drive financial markets more than financials or technicals combined. In 2019, Bitcoin climbed in tandem with precious metals and was pegged as digital gold. Later in 2020 and 2021, it was the “fastest horse” in the race against inflation and it took the cryptocurrency market to new all-time highs.
But then the narrative turned bleak and bearish. Rising rates and a hawkish Federal Reserve, coupled with failure to work as an inflation hedge during the hottest inflation numbers in several decades, cut Bitcoin price down by 78%. Now, after Operation Chokepoint and the attack on the cryptocurrency industry, the same the US government is now kickstarting a bull run in crypto by once again bailing out banks.
Bitcoin was created in 2009 amidst historic bank bailouts at the time. Hidden within the Genesis Block is a reference to these events. Fourteen years later, the cryptocurrency is having its first major beta test.
Bitcoin was made to allow individuals to be their own banks and be freed from the collateral damage of repeated examples of human greed. It appears the market could be realizing this very fact now, and causing a buying spree across crypto. But will the narrative be capable of taking BTC to new highs?
A little chilling that these bank runs are starting precisely 90 years after Proclamation 2039: https://t.co/AS4Wy8RxQ3
— Tony "The Bull" (@tonythebullBTC) March 13, 2023