SVB and SBNY just got bailed out today. A reminder... Financial regulators said Sunday night depositors of the failed Silicon Valley Bank will have access to all of their money starting Monday, March 13, while announcing new facilities to backstop deposit withdrawals across the banking system amid fears of contagion following SVB's shock failure last week. In a joint statement, the heads of the Federal Reserve, Treasury Department, and FDIC said: "After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors." "Depositors will have access to all of their money starting Monday, March 13," the statement added. "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer." The Federal Reserve also said it will offer funding to banks through a new facility to help ensure banks can meet all depositor withdrawals, essentially backstopping all deposits — both those insured and uninsured — across the U.S. financial system. The Fed's financing will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year to banks, savings associations, and credit unions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.
Is the rise in BTC just people transferring their bank deposits to Bitcoin/Ethereum? Interesting move for sure. I bought Mar 14 straddle at $14. $14 puts -45%, $14 calls up ~700%.
Is BTC going higher because the depositors in the regional banks have wised up and moved their money or is it a safe haven move like Silver & Gold?
Despite their PhDs, the higher ups at the Fed have no idea where this whole QE experiment will end up. The latest banking crisis came out of the blue. I wonder what's next. Among other things, BTC is a bet/hedge against the current system.
Crypto and gold in the past were fighting each other, in compitition, working opposite, they are now operating in tandem. Be interesting to see for how long. Both appear to be hedging against trust in the banking system. Gold index today on asx up 7.75%. Crypto etf on asx up 11%.
This seems to make sense for now at least, however it is still possible that cryptos are rising as a delayed reaction the FANG+ index rise due to the collapse in the US 10 Year yield. I mean it doesn't really matter since Gold itself is rising due to the same reason -- falling rates and the added bonus of falling USD which also helps BTC/ETH.
I recall a year or two ago the opinion seemed to be that gold and crypto competed against each other, in particular crypto was taking business off gold as crypto was new school and gold was old fuddy duddy school. Crypto appeared correlated to markets, gold was (meant to be) a defensive instrument, meant to rise when markets tanked. I've been going through quite a new learning experience lately, most often correlations are fleeting and random. Gold always had me mostly perplexed, it kind of moves in an unfathomable direction (I thought and experienced) but very recently discovered the/a secret what makes it tick. I'm still of the mind knowing 'this secret' not to trade gold again, it's trend cycles are too short for my liking.
I would say gold was considered a safe haven up to 2008. When stocks tumbled, bonds and gold rose (for the most part). After 2008, with all these quantitative easing, the correlation between stock and gold all but evaporated.