Bitcoin News: US Banking System Troubled, Bitcoin Rising?

The U.S. banking system is reportedly in trouble as more than 2,300 financial institutions have liabilities greater than the assets they own, according to the latest analysis. Today's crypto news we summarize directly from tradingview.com site. Analysts also say that this situation could affect the price of Bitcoin in the coming weeks and months, especially if the government does not take careful steps. Although the U.S. Treasury Department and the Federal Reserve have said that the problem is only happening to individual banks, experts worry the situation is much worse than the government admits. With the anti-inflation measures taken, almost half of the 4,800 banks in the United States have burned through their capital buffers, and there is still further tightening to be carried out by the Fed.

The full effect of monetary tightening by the Fed is still not yet felt on the economy, and experts will wait to see if the United States financial system can safely reduce excess leverage caused by extreme monetary stimulus during the pandemic of 2020 to 2021. The White House does not provide comprehensive guarantees for all savings because it can be considered a social welfare provision for the wealthy. In addition, the Federal Deposit Insurance Corporation (FDIC) reportedly has only $127 billion in assets and may require its own bailout. As a result, financial institutions are now pressuring the United States Securities and Exchange Commission to act on profitable short-selling strategies when bank stocks are declining. 

The CEO of the Consumer Bankers Association, Lindsey Johnson, urged policymakers to take seriously the financial turmoil caused by short-sellers. The incident that befell banking in the US seems to be a concern for the Biden administration. If thousands of U.S. banks go out of business, then chances are that some investors will turn to Bitcoin as a way of protecting their assets. The Biden administration's stance towards cryptocurrencies does affect the price of Bitcoin, and actions that harm the banking system could push the price of Bitcoin higher even above $40,000. The Securities and Exchange Commission (SEC) is not currently considering a ban on short-selling bank stock, according to a senior agency official.

In 2008, the SEC called for a time-out on short-selling of nearly 1,000 financial stocks in an effort to restore confidence in the public market. However, the New York Fed later found that the ban did little to stem the financial stock market from getting out of control. Another study shows that most of the stocks affected by the ban have experienced a decline in trust from the public. In addition, these stocks also experienced significant declines in market quality, price, and volatility. When financial institutions pressure the SEC to take action against short selling and their role in the market, it can affect the U.S. public's confidence in the financial system. However, a careless move to pull the pin could create a new, bigger loophole, and likely increase the price of crypto and bitcoin.