Charles Hoskinson, Cardano’s originator, has been contemplating the future of Bitcoin and various digital currencies in the event of another financial meltdown akin to or worse than that of 2008. As of the present writing, Bitcoin has nearly recovered to twice its lowest 2022 value, signaling a potential resurgence for cryptocurrency investors. Ethereum, a significant altcoin, has also experienced a similar uptick, with its creator, Vitalik Buterin, hinting at the possibility of an approaching bull market.
Hoskinson, who also co-founded Ethereum, has indicated that a banking crisis in the United States could precipitate a disaster surpassing the severity of the 2008 downturn, which initially sparked the development of Bitcoin. He previously reported to Fox Business in 2014 that banks had $373 billion in tied assets during the 2008 crisis. He predicts that a similar crisis in 2023 could exceed $540 billion, marking just the initial phase of the financial fallout. He argues that traditional business models are vulnerable to collapse when subjected to minor shocks, leading to the loss of key institutions like Silicon Valley Bank (SVB), which then become highly politicized and globalized.
Prominent banks such as SVB and Signature Bank declared bankruptcy in March, prompting the U.S. Federal Reserve to implement emergency measures. The potential downfall of the banking sector has had a domino effect, with even Swiss bank Credit Suisse teetering on the brink of bankruptcy before being rescued by its competitor, UBS. Most recently, authorities seized the assets of First Republic Bank, selling them off to JPMorgan. Jamie Dimon, CEO of JPMorgan, a critical player in the 2008 crisis, stated that they had responded to the government’s call to action.
Hoskinson believes that the magnitude of the U.S. bank collapses is too substantial to contain, anticipating that the impact will radiate to larger financial institutions. He compared the situation to a replay of the 2008 scenario, suggesting that it is a narrative no one would want to revisit.
Hoskinson identifies several factors contributing to the potential 2023 banking crisis, including the consistent interest rate hikes by The Fed over the past year. He argues that the central bank’s anti-inflation measures will likely lead to a downfall of the U.S. economic and financial sector, similar to the puppet masters behind the previous banking crises. Meanwhile, analysts posit that restoring faith in the system could prevent the banking crisis from spiraling out of control.
As per Robert Kiyosaki’s perspective, Bitcoin and other cryptocurrencies might experience a positive surge, akin to gold and silver. However, the future of all other cryptos (altcoins) is not uniformly promising, given their diverse characteristics, utilities, statuses, and potentials.
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