Bernstein Analysts Talked About Banking Sector and Bitcoin!

According to Bernstein analysts, the recent banking crisis that shook the world showed how banking transactions have transformed in the era of social media and instant payments, and any crisis that may come from now on. Bitcoin (BTC) can be very important to

Bernstein Analysts Believe Bitcoin Will Last

“Welcome to a new world of hyper-fast information flows and hyper-fast banking transactions,” said Bernstein analysts, led by Gautam Chhugani, in a note citing the social media fuss during the collapse of Silicon Valley Bank (SVB).

In the week ending March 15, close to $120 billion in deposits had left regional banks, with more than half of them going to big banks. The crisis also spread to Europe, resulting in UBS’s acquisition of long-term rival Credit Suisse on March 19 at a much undervalued price.

Chhugani said banks are facing a new risk they “never realized”.

Bernstein said that the new era of hyper-fast deposit outflows brings with it unknown counterparty risks for customers, and that cryptocurrencies can actually help mitigate some of these risks.

“The simplicity of crypto as digital bearer assets instantly resolves the counterparty risks that bank customers deal with, but customers also need stability of value,” Chhugani wrote.

However, according to analysts, Bitcoin is not without its own difficulties. BTC is still volatile, prone to hacking and regulatory uncertainty. Moreover, some critics argue that BTC is not a viable alternative to fiat money because it lacks real value and widespread acceptance.

While Bernstein acknowledges these disadvantages, he said they can be overcome over time:

“Bitcoin is still an experiment, but one that has survived many shocks throughout its 14-year history. We believe it is permanent and will continue to evolve as an asset class.”

*Not investment advice.