Earn Your First Bitcoin Sign up and get Bonus Referral bonus up to ,000 Sign up In the long run, the banking crisis that we’re presently seeing has helped assets like bitcoin and Ethereum really step into the limelight and do much better than they did in 2022. However, Charles Hoskinson – the co-founder of Ethereum and the creator of ETH rival Cardano – recently stated that he thinks the crisis will get a lot worse, and that in the end, it could have negative effects on crypto. Charles Hoskinson on Where Banks Will Go In an interview, Hoskinson said he thinks the crisis of 2008 and 2009 will be nothing like what’s coming. He mentioned: In 2008, we had 3 billion in tied-up assets. I
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Sign upIn the long run, the banking crisis that we’re presently seeing has helped assets like bitcoin and Ethereum really step into the limelight and do much better than they did in 2022. However, Charles Hoskinson – the co-founder of Ethereum and the creator of ETH rival Cardano – recently stated that he thinks the crisis will get a lot worse, and that in the end, it could have negative effects on crypto.
Charles Hoskinson on Where Banks Will Go
In an interview, Hoskinson said he thinks the crisis of 2008 and 2009 will be nothing like what’s coming. He mentioned:
In 2008, we had $373 billion in tied-up assets. I think we’re over $540 billion now just in the 2023 crisis. We’re just getting started. That whole business model is falling apart when you give it a little bit of a push and then you lose these institutions like Silicon Valley Bank, and they get so politicized, and they get so globalized.
Not long ago, the banking crisis was exacerbated when First Republic Bank became the latest financial institution to join the ranks of Silicon Valley Bank, Signature, and others. FRB went up in smoke and had all its assets sold off or provided to competing firms like JPMorgan Chase, which was glad to step in and offer a helping hand according to head executive Jamie Dimon. He mentioned:
Our government invited us and others to step up, and we did.
It’s ironic that both Dimon and JPMorgan both played big parts in the 2008 Great Recession, and it looks like they’re being set up to play big roles again.
Hoskinson is convinced that the events of 15 years ago are not only going to repeat themselves, but they’re likely to be even larger, and he isn’t predicting good outcomes for any assets, whether they be bitcoin, Ethereum, gold, or obscure coins. He stated:
What’s going to happen is ‘too big to fail’ is just going to lead to bigger institutions. We’ve seen this story in 2008, and this is the rerun. I don’t think anybody wants to watch it.
What Happens from Here?
Bill Ackman – chief executive of New York hedge fund Pershing Square – agrees with Hoskinson that the present banking crisis could reach unprecedented levels. He stated:
Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble. We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC [Federal Deposit Insurance Corporation] and our government wake up? We need a systemwide deposit guarantee regime now.
Thus far in 2023, the banking crisis has already (presumably) contributed to the Federal Reserve hiking rates not once, but twice.