“Instability in the Banking System Threatens Stablecoins and DeFi”
Known for her support for Bitcoin and her $1 million price prediction, Ark Invest CEO Cathie Wood discussed the banks that went bankrupt in the United States at short intervals. The US banking system, which was hit hard by the bankruptcy of US banks Silvergate, Silicon Valley Bank and Signature Bank, is trying to recover with bailout plans from regulatory agencies.
Cathie Wood, who shared a post about the events in the USA, claimed that the banking system in the country was destabilized. Speaking of cryptocurrencies with praiseworthy words, the famous CEO said that despite the destabilization of the banking sector, cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) continue to work. Wood also added that instability in the banking system threatens stablecoins and DeFi.
“While the US banking system was seizing up in response to bank runs threatening regional banks, Bitcoin, Ethereum, and other crypto networks didn’t skip a beat. Instability in the banking system threatened stablecoins, the on-ramps to DeFi, in stark contrast to regulator rhetoric.”
“Instead of blocking decentralized, transparent, auditable and well-functioning financial platforms with no central points of failure, regulators should have been focused on the centralized and opaque points of failure looming in the traditional banking system.”
“They should have been all over the crisis that was looming in plain sight: asset and liability duration mismatches as short rates soared 19-fold in less than a year and deposits in the banking system were falling on a year-over-year basis for the first time since the 1920s!”
Stating that although the banking crisis in the USA said that it was coming, the regulators did not do anything, referring to the Great Depression that hit the USA in 1929, and claimed that the clear signs of the crisis were appearing and were similar to the crisis in the 1920s. This sharing of Cathie Wood also received support from Elon Musk, the owner of Twitter. Musk commented that the current situation in banks is very similar to the situation in 1929.
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