• Early May saw a small dip in Bitcoin after the drama surrounding First Republic Bank reached a new peak.
• Alex Thorn commented that it is unknown if the banking crisis will continue to be a boon for Bitcoin, however there are positive near-term catalysts and macro environment supportive of gold and Bitcoin.
• The current banking crisis has brought about a new “safe haven” status for Bitcoin as more people back these assets, support them and invest in them as means of keeping their wealth stable.
First Republic Bank Has Fallen
Early last month, regulators acquired First Republic Bank and circulated most of its assets and deposits to institutions like JPMorgan Chase. This marks the third major bank failure this year, making many fear the days of the 2008 Great Recession are on their way back.
Alex Thorn’s Comments
Alex Thorn – head of firmwide research at Galaxy – commented in a recent interview that it is unclear whether the banking crisis narrative can continue to be a boon for bitcoin. He further stated that bitcoin accumulation by small addresses is outpacing issuance and Ethereum staking is expected to increase – providing supportive supply narratives outside crypto-native factors such as tightening, recession, and an expanding multipolarity in the global economy – which could all be supportive of gold and bitcoin.
The Current Banking Crisis
The banking crisis in America and Europe has been two-fold in many ways: On one hand it has created fear another financial crisis like 2008 may be around the corner; on the other hand it has brought about a new “safe haven” status for Bitcoin as more people back these assets, support them and invest in them as a means of keeping their wealth stable during this present period of financial strife.
Positive Near-Term Catalysts & Macro Environment
Thorn noted that Bitcoin started 2023 organically cheap which allows plenty for room to move higher off a low-base effect due to widening banking crises becoming evident in March; he believes this contrasting with Bitcoin’s transparent & decentralized nature provides further leg up for currencies like Bitcoin.
Ultimately it remains unclear whether or not this banking crisis will have long term implications on cryptocurrencies like Bitcoin but investors seem optimistic, backing these digital currencies & investing into them as safe havens during turbulent times ahead.