ARK Invest’s Cathie Wood Claims Current Banking Crisis Was Inevitable
15 Mars 2023 - 09:48AM
NEWSBTC
Cathie Wood, the founder of ARK Invest, an American investment
management firm that invests in disruptive technologies, including
exposure to cryptocurrencies, thinks the current banking crisis in
the United States was inevitable. The U.S. Banking Crisis Was
Coming: ARK Invest Founder In a tweet on March 14, Wood said the
banking crisis was looming in plain sight and is blaming regulators
for not taking timely steps to avert the problem. While the
US banking system was seizing up in response to bank runs
threatening regional banks, Bitcoin, Ethereum, and other crypto
networks didn’t skip a beat. Instability in the banking system
threatened stablecoins, the on-ramps to DeFi, in stark contrast to
regulator rhetoric https://t.co/r5xwC96Pdj — Cathie Wood
(@CathieDWood) March 15, 2023 In her assessment, regulators,
including the United States Securities and Exchange Commission
(SEC) and the rest, should block the proliferation of centralized
finance (CeFi) platforms which she says are opaque. Related
Reading: Signature Bank’s Closure Is Political And A Strong
Anti-Crypto Message, Ex-Congressman Moreover, the founder pointed
out what she said were “assets and liability duration mismatches”
that made banks distressed, especially as deposits ran low. In her
view, bank deposits have been decreasing on a year-on-year basis
for the first time in over a decade. With this combination, Wood
thinks it was hard for the Federal Reserve and government to
prevent a crisis from happening. “They should have been all
over the crisis that was looming in plain sight: asset and
liability duration mismatches as short rates soared 19-fold in less
than a year and deposits in the banking system were falling on a
year-over-year basis for the first time since the 1920s!” the
founder said. Bitcoin And Crypto Rally At the heart of DeFi and
crypto are stablecoins like USDC, the fiat-backed token issued by
Circle, USDT issued by Tether Holdings, and DAI, an algorithmic
stablecoin. All of them are central to the industry, acting as
conduits of capital from traditional finance to the broader crypto
ecosystem. Cathie Wood said even as the government and the Federal
Reserve scrambled to stem a banking collapse, decentralized
networks like Bitcoin and Ethereum operated as usual. For the past
five trading days, Bitcoin prices, for instance, have been on an
uptrend, reaching as high as $26,300 on March 14, printing a new Q1
2023 high. Ethereum also remains firm, recovering from last week’s
losses. Since the banking chaos began, only USDC by Circle was
temporarily impacted following their exposure to Silicon Valley
Bank (SVB). Last week, the regional bank was placed under
receivership by California authorities. Although USDC de-pegged, it
is currently trading at parity with the USD. Related Reading:
Moody’s Expect U.S. Banks To Deteriorate, Boon For Bitcoin? Despite
the banking crisis being a boon for Bitcoin and other
cryptocurrencies, the events of the past six months have been
distressing for coin holders. In November, following the collapse
of FTX, a cryptocurrency exchange, Bitcoin crashed to register new
2022, falling to as low as $15,300. The DeFi and non-fungible token
(NFT) ecosystems also contracted as activity dropped. However, in a
report in early February, ARK Invest said Bitcoin would soar to as
high as $1.48 million in seven years. Feature Image From Canva,
Chart From TradingView
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