There is a development that will affect the Bitcoin price. Billions of dollars have flowed into American banks. So, will cryptocurrencies benefit from this? Let’s look at the details.
Innovative approaches of banks support the increase in deposits
US banks are implementing new strategies to regain customer confidence and increase deposits. Accordingly, it experienced a flow of approximately 47 billion dollars in a week. According to the Federal Reserve Economic Data (FRED) system, depositors added an impressive $46.95 billion to their American bank accounts in the week ending June 21.
Banks aim to reverse deposit runaway. Accordingly, they are successfully implementing new strategies aimed at attracting customers. Accordingly, these innovative approaches contribute to the significant increase in deposits.
Borrowing and brokered deposits
Regional banks went to borrow substantial cash from the Federal Reserve. It also resorted to using third-party brokered deposits facilitated by lesser known brokers. Although this tactic has supported the increase in deposits, it also brings long-term costs.
Analysis of regulatory filings by the 84 largest banks reveals the rising borrowing costs associated with these channels and their potential impact on earnings. According to this cryptocoin.com When we look at it as a whole, rising costs pose a threat to banks. On the other hand, it potentially causes them to pay more than they earn from lending activities to save the necessary cash.
Current deposit figures and Bitcoin
The increase in brokered deposits is especially noticeable in Los Angeles-based PacWest Bancorp. This company recorded a staggering 1,774 percent increase in brokered deposits in the quarter compared to the previous year. But these deposits have expensive acquisition costs. They are also often referred to as “hot money” due to their shorter lifespan in bank accounts.
The total amount of deposits in US banks reached $ 17.34 trillion, revealing the recent increase in customer deposits. However, despite last week’s growth, this figure remains well below the $18.10 trillion recorded a year ago. So, will this cause an increase in Bitcoin price? Frankly, as of now, there does not seem to be a situation that will affect the price of Bitcoin. Because we see that this money does not flow into Bitcoin and crypto money. On the other hand, Bitcoin currently continues to float in stagnant waters. Looking at today, the price is at the level of $ 30,500.
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