A dark day for Silicon Valley Bank is Bitcoin’s time to shine

BitcoinBTC
, the digital currency that has long been viewed with skepticism by the financial establishment, is having its moment in the sun. Following the failure of Silicon Valley Bank — the biggest bank bust since the dark days of 2008 — and with Monday’s shutdown of Signature Bank, bitcoin has surged nearly 20% in the past 24 hours.

Bitcoin’s rise is especially sweet for its supporters, who have long argued that it represents a good alternative to the traditional banking system. As the KBW Bank index plunges 10% in a single day and Wall Street titans scramble for yet another government bailout, bitcoiners, who have endured the so-called crypto winter, are taking a victory lap.

“Our economy will not function effectively without our community and regional banking system,” Bill Ackman, one such Wall Street titan, tweeted Monday. “That’s why @FDICgov must explicitly guarantee all deposits now. Hours matter.”

Schadenfreude, anyone?

Of course, bitcoin’s recent rise is no guarantee of anything, let alone long-term viability. The currency is still down by approx. 65% from its all-time high, and the price remains notoriously haywire. But for bitcoiners, Monday’s rally is a welcome respite from the constant nagging of the financial establishment.

At least three of bitcoin’s big boosters gloat-tweeted their delight on Monday.

River, a bitcoin exchange, tweeted: “We are seeing a huge influx of new customers. People are realizing the importance of good money without counterparty risk.”

Translation: “We told you so.”

The CEO of Swan Bitcoin, Cory Klippsten, told the world about the popularity of trading activity on the exchange: “HUGE volumes on Swan in the last 72 hours.”

Jack Mallers, creator of the bitcoin app Strike, also couldn’t resist a bit of bragging: “cant bankrun rates [sic]. record volume during strike. stack them 24/7. stack them with as little as $0.01. pile them directly into your custody.”

Oh, the irony of it all. While traditional banks struggle to maintain the trust of their customers, bitcoin’s decentralized system suddenly looks at least a little appealing. As Satoshi Nakamoto, bitcoin’s enigmatic creator, once put it: “The root problem with conventional currency is all the trust required to make it work.” Well, it turns out that bitcoin’s trustless system has its own allure.

Of course, there is still a long way to go before bitcoin can truly be considered a mainstream alternative to traditional banking systems. But at least for now, bitcoiners can shake their heads as the banking system once again relies on the government to throw it a lifeline.

Who’s laughing now?