A Dark Day For Silicon Valley Bank Is Bitcoin’s Time To Shine
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Getty Images Bitcoin BTC , the digital currency that has long been viewed with skepticism by the financial establishment, is having its moment in the sun. Following the failure of Silicon Valley Bank — the biggest bank bust since the dark days of 2008 — and with Monday’s closure of Signature Bank, bitcoin has surged nearly 20% in the past 24 hours.
Bitcoin’s rise is particularly sweet for its adherents, who’ve long argued that it represents a sound alternative to the traditional banking system. As the KBW Bank Index tumbles 10% in a single day and Wall Street titans root for yet another government bailout, bitcoiners, who’ve endured the so-called crypto winter, are taking a victory lap.
“Our economy will not function effectively without our community and regional banking system,” Bill Ackman, one such Wall Street titan, tweeted Monday. “Therefore, the @FDICgov needs to explicitly guarantee all deposits now. Hours matter.”
Of course, bitcoin’s recent surge is no guarantee of anything, let alone long-term viability. The currency is still down about 65% from its all-time high, and its price remains notoriously haywire. But for bitcoiners, Monday’s rally is a welcome reprieve from the constant naysaying of the financial establishment.
At least three of bitcoin’s big boosters gloat-tweeted their joy Monday.
River, a bitcoin exchange, tweeted, “We are seeing a huge flow of new customers. People are realizing the importance of sound money with no counterparty risk.”
Translation: “We told you so.”
The CEO of Swan Bitcoin, Cory Klippsten, told the world about the popularity of trading activity on the exchange: “HUGE volumes at Swan over the past 72 hours.”
Jack Mallers, the creator of the bitcoin app Strike, couldn’t resist a little bragging either: “cant bankrun sats [sic]. record volumes at strike. stack em 24/7. stack em with as little as $0.01. stack em directly to your custody.”
Oh, the irony of it all. While traditional banks struggle to maintain the trust of their customers, bitcoin’s decentralized system is suddenly looking at least a little appealing. As Satoshi Nakamoto, bitcoin’s enigmatic creator, once put it, “The root problem with conventional currency is all the trust that’s required to make it work.” Well, turns out bitcoin’s trustless system has its own allure.
Of course, there’s still a long way to go before bitcoin can truly be considered a mainstream alternative to traditional banking systems. But at least for now, bitcoiners can shake their heads as the banking system once again depends on the government to throw it a lifeline.
Who’s laughing now?
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