The recent banking crisis highlights the importance of Blockchain-based cryptocurrency such as Bitcoin.

Rating agency Moody’s recently downgraded the outlook for the entire US banking system to stable negative. The move comes in the wake of scandals at Silicon Valley Bank, Silvergate Bank and Signature Bank, which prompted regulators to come up with a bailout plan for affected depositors and institutions.

Despite the decline, the bank’s shares rose sharply, and SPDR Bank’s exchange-traded currency fell nearly 6.5% in morning trading, NBC News reported. Moody’s warned that a prolonged period of low interest rates, combined with the tightening of fiscal and monetary policies related to the pandemic, has made the bank’s operations more difficult. Banks suffered unprecedented large losses on securities and US non-retail and unsecured loans.

The rating agency expects the US economy to hit a recession later this year, further weakening the financial sector. Based on the recent Moody’s downgrade, it is clear that traditional banking systems are struggling to cope with the demands and challenges of today’s world. As interest rates rise and the economy shrinks, more banks fail and more depositors are affected.

Some crypto-enthusiasts believe that cryptocurrency, especially Bitcoin, was created in the moment because its birth was inspired by the 2008 financial crisis. Reacting to the financial crisis and banking crashes, Bitcoin rose to its highest level since June, crossing the $26,000 mark.

Twitter user @luke_broyles shared his thoughts on why more people should use Bitcoin:

For crypto-enthusiasts, blockchain-based assets like Bitcoin are a great alternative to the failing traditional banking system.

Speaking to Cointelegraph, Trezor Bitcoin analyst Josef Tětek said that Bitcoin’s current surge appears to be a direct result of a “fragile banking system.” Tětek noted that the current banking crisis could make Bitcoin a safe haven and risk-free asset. He explained that Bitcoin was created shortly after the world was hit by the 2008 financial crisis and “can be seen as a response to the injustice of the bailouts.”

According to Tětek, the recent banking problems clearly show that counterparty risk in the banking system is a “big problem”, although sometimes it is still hidden. He said, “It’s a nice job.

“Banks no longer hold our money, they lend it to us and buy volatile assets with it. Basically, savers are bank lenders. Understandably, people are looking for alternative methods such as Bitcoin.
Related: Bitcoin Drops $26,000 as US Inflation Hits 6%

By providing a safer, more transparent and efficient financial system, many technology enthusiasts believe that blockchain-based currencies and cryptocurrencies like Bitcoin can play a key role in reducing the impact of traditional banking and providing financial access to individuals and businesses. services they need.

Source: CoinTelegraph