"There's decades where nothing happens, and there's weeks where decades happen."
The first half of March has been nothing short of a roller coaster:
- Silvergate bank shuts down operations.
- Silicon Valley Bank suffers bank run, gets bailed out.
- Signature Bank suffers bank run, gets failed out.
- Credit Suisse fears imminent bank run, gets bail out promise.
- Media labels a banking crisis and bank shares across the board fall:
But Crypto, Rises?
Usually we get excited when crypto goes up for no rhyme or reason, but this time, we are more excited, because crypto is showing strength while banks are showing weakness and mass fear by their customers.
Is this just a fluke? Could be, but perhaps something more interesting is occuring in the sentiment of the financial markets.
Flee to Safety Assets
Bitcoin was created in response to the 2008 financial crisis.
A store of value that had predefined rules which could not be broken, and a fixed supply that could not be inflated.
At the moment not only has the world suffered from having their native currencies inflated by their government's money printers due to post-COVID stimulus, but now their faith in the 'guardians' of their money is at a low.
Bitcoin is an exit from the Fed.
— Naval (@naval) January 3, 2021
DeFi is an exit from Wall Street.
Social media is an exit from mass media.
Homeschooling is an exit from industrial education.
Remote work is an exit from 9-5.
Creator economy is an exit from employment.
Individuals are leaving institutions.
As trust in centralized currencies and centralized banking lowers, the appeal of decentralized money and self-custody storage grows.
This might be why more heads are beginning to turn, in hopes that a blockchain based currency or eco-system could be a solution that sits at the opposite end of the traditional finance spectrum.
What About Ethereum?
While Bitcoin provides an alternative 'hard money', Ethereum provides financial rails that are home to a permissionless and transparent eco-system:
- peer to peer lending and borrowing markets
- derivatives trading and perpetuals
- decentralized exchanges for freely trading crypto
- Global instant payments
- Options trading and synthetic assets
- Real world assets on-chain
This new and transparent base layer is starting to seem more appealing by the day, especially with our current financial system letting us down.
This is the first time in history where Bitcoin and Ethereum have existed during a comparable banking crisis or potential recession, which might mean we see a narrative shift which we haven't seen before.
Learn More About Decentralized Finance
Interesting times ahead, be sure that you get up to speed on how to take advantage of this new frontier that blockchains have to offer via this free DeFi education website: https://letsdodefi.com/
