Bitcoin Approaches $27,000 On Bank Trouble – Trustnodes

Bitcoin briefly touched $27,000 for the first time in nine months, and it continued to trade near $26,500 at the time of writing.

Stocks on the other hand have seen a red day with the Dow Jones down 1% while gas fell 5% and oil fell 1.5%.

Credit Suisse saw a bigger drop of 7% despite assurances from the Swiss central bank of a $50bn loan chest.

First Republic, another wobbly bank, also saw a far bigger drop of 26% on the day after big banks put in $30 billion to bail out the market.

However, the market is gripped by uncertainty, primarily due to a lack of transparency in relation to exactly what is happening in these banks.

So commodities like gold are up 2.5% today, while bonds are down to 3.4% in yield from around 4% in February.

Bitcoin has also joined the “party” for safe assets, with the crypto now returning to a healthy and safe strict oasis of calm, unlike last year.

However, that bear year moved pretty fast in crypto, punishing the reckless pretty hard to get back into the sound money business, where you can’t spare parts without playing with fire.

So FTX, Luna and all that is the very old story, in crypto, and the brand new one in fiat that can make bitcoin go maybe even parabolic.

Almost exactly four years ago today, bitcoin soared from $4,000 in April to $16,000 in June 2019, apparently triggered by our own April Fool’s joke here at Trustnodes.

If it repeats, corn could go towards $50,000 and the macro is quite ripe for that, but first it has some resistance at $28,000.

However, how strong the resistance is depends on how quickly the grain wants to move, as the break at $25,000 may have removed some of the resistance at $28,000 to give a little more way to the $32,000 resistance.

But all on the upswing, potentially as the grain will do whatever it wants, but crypto is at least narratively now back to being an insurance policy and far more so than in almost a decade.

Ten years on from the Cyprus haircuts, a much larger public can now see first-hand and contrast the old paper bank with the new code-based digital banking.

Sure, we had collapses here last year too, but that’s why we built defi where there were no collapses – apart from the usual hacks-hiccups of smaller projects or of non-deterministic sums.

However, some wanted to game that definition in centralized entities, and we’re all pro-choice, so that’s their business.

However, we could see these centralized entities on the public blockchain. There was therefore no real uncertainty, as for something like FTX for example everything that needed to be known to the market was known within 48 to maybe 72 hours, including how far the contagion might go, who was affected, what are the quantities , and pretty much everything.

The only unknown was whether the authorities would act to send Sam Bankman-Fried, FTX’s CEO, to jail for not being on the blockchain. They sent him, as it happened, to court.

In the paper system, unlike the banking system, the same type of information is in confidential documents and reports with regulators, and even they are only part of the picture.

We therefore have to trust both that the banks themselves are truthful and that regulators are as well, and we are left with just trying to analyze peculiar actions such as large banks making deposits at smaller banks.

If this doesn’t show that crypto money, if not the future, is and will be a significant part of it, then go build a stone age escapado on the Metaverse because that’s where you belong.

However, the banking system currently has its role, and a very important one. Also, as the example of four years ago shows, the current price action may very fundamentally have little to do with that banking system.

Some people see the two in competition, we see them as more like one upgrading the other because crypto holistically is a hybrid system where you have bearer assets but also bank-like entities or trusted intermediaries that operate on the very transparent rails of the blockchain .

It is a new form of limiting the trust that is required and that can be abused, to limit the uncertainty that in itself can be very harmful.

A new form of knowledge in other words, financial knowledge, and which translates into a new form of power, for man.

These banking problems are therefore, as far as crypto is concerned, more of a re-establishment of some facts.

It is that crypto is not unsafe, no more than other assets in any case, including fiat, and that crypto is not uniquely volatile as we have seen with “safe” bonds and what becomes bank meme stocks.

Of course, many in finance knew all this already, which is why many young bankers have joined this space, but the wider public can now learn it too, certainly anyone with more than $250,000 who needs to put it somewhere, you would believe anyway.

And so bitcoin is back, with a train. It has left another $25,000 station, but whether it will return is anyone’s guess, but this guy could be on a very long journey, a train journey, from California to New York, and right now it could still be in San Francisco.