Bitcoin Takes Over as an Alternative Amid Talks About Credit Suisse Bank Collapse
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Answer Bitcoin Takes Over as an Alternative Amid Talks About Credit Suisse Bank Collapse
Another Lehman-like moment is shaping up in the banking space where the Swiss banking giant Credit Suisse is now going through awkward times.
Ulrich Koerner, CEO of Credit Suisse, told:
The bank is preparing for reforms.
Swiss bank default swaps, the cost of insuring a company’s bonds against default, jumped 15% last week to levels not seen since the 2009 Lehman crisis.
Besides Credit Suisse, Deutsche Bank is also supposed to be in a similar situation.
The combined asset base of these two European banks is $2.5 trillion, which is four times the asset base of Lehman Brothers at the time of its collapse.
As history can repeat itself, global investors are once again turning their attention to Bitcoin as a haven in times like these.
The decentralized cryptocurrency was created after the collapse of Lehman and the isolation of investors from banking institutions and global markets.
While the global market showed tremendous volatility last week, it is surprising that Bitcoin remains so solid.
As of press time, Bitcoin is trading at $19,115 with a total market capitalization of $367 billion.
If Credit Suisse really goes the Lehman way, it could potentially be a massive boost for bitcoin and cryptocurrency over the next decade.
Turning to Bitcoin or Gold?
Commenting on this latest development, Barry Silbert, founder of Digital Currency Group, Grayscale Investments’ parent company, wrote:Read:WikiLeaks Holds Over $46 Million in Bitcoin
Bitcoin is about to become a safe haven asset.
There is no other place to hide.
Bitcoin critic Peter Schiff was quick to respond, saying that it would be wise to buy gold and ignore Bitcoin.
and tweeted By saying:
Where do you hide from the Grayscale Bitcoin Trust?
It’s down 80%.
Why would Bitcoin suddenly become a safe asset if it was never a safe haven in the past?
If you want a safe haven, drop bitcoin and buy gold.Read:The digital currency Dogecoin is advancing in the ranking in terms of market capitalization after increasing by more than 100%
While Mike McGlone, chief commodity strategist at Bloomberg, recently said that both bitcoin and gold could outperform over the next decade given the current macro scenario.
Most central banks in history raise interest rates as the world tilts toward a recession.
Falling commodity and risk asset prices may be the only way out of the deflationary effects, which would boost the price of gold and its digital version of Bitcoin.
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