"The more banks collapse, the more BTC prices are expected to rise."
An analyst expects the price of cryptocurrency king Bitcoin (BTC) to break above $40,000 as 2,300 financial institutions may have more liabilities than assets as a result of the banking crisis experienced by the United States (US).
Although the US treasury and the Federal Reserve (Fed) said the problem was specific to individual banks only, experts warned the situation could worsen as the central bank continues to act aggressively to deal with inflation.
In addition to the Federal Deposit Insurance Corporation (FDIC) needing a bailout* of its own after only having $127 billion in assets, the White House is reportedly not offering blanket guarantees for all deposits because it looks like social welfare for the rich.
*financial aid to a failing business or economy to save it from collapse
Therefore, Lindsey Johnson, Chief Executive Officer (CEO) of the Consumer Bankers Association urged the US Securities and Exchange Commission (SEC) to crack down on short selling strategies that generate profits when bank stocks decline.
Understandably, some investors may turn to BTC as a way to protect their assets if thousands of banks in the US experience collapse coupled with the Joe Biden administration's stance on crypto.
According to a senior official of the agency, the SEC is currently refusing to implement any ban on short selling bank shares as the action does not actually help much in curbing the financial stock market which is getting out of control.
Even so, crypto prices, including BTC, are able to rise when financial institutions urge the SEC to take action against short-sellers, further shaking the US people's confidence in the financial system.
