Trezor Declared that Silvergate, SBV and Signature Fallout is Beneficial for Bitcoin
An executive from the hardware wallet firm Trezor has stated that the current situation of banks in the U.S. could be beneficial for Bitcoin (BTC).
On March 14, Bitcoin went above $26,000 for the first time since June 2022, making it the most prominent jump in value this year. This increase was triggered by a series of unexpected occurrences in the American banking industry, including Silicon Valley Bank (SVB), Silvergate and Signature discontinuing their services.
Josef Tětek, a Trezor Bitcoin analyst, has suggested that the sudden surge in Bitcoin’s value this year – the most rapid increase in price seen so far in 2023 – is likely due to people’s perception of banks being vulnerable.
Tětek indicated that the ongoing banking trouble might be the impetus for Bitcoin to be seen as a secure refuge and a risk-averse commodity. He highlighted that Bitcoin was established shortly after the 2008 global financial crisis, potentially in response to the unfairness of bailouts.
Tětek stated that the current events emphasize the importance of Bitcoin, while not being beneficial to many crypto enterprises and centralized assets, such as Circle’s USD Coin (USDC). The analyst stated:
“The current demise of certain banks is definitely good for Bitcoin as such, but not a good environment for custodians of any kind, and once again we reiterate that one the safest environments is to self-custody assets.”
Tětek believes that the recent happenings with Silvergate and SVB demonstrate that counterparty risk in banking is an issue that should not be taken lightly, even though it can sometimes be hard to detect. He added:
“Banks no longer actually hold our money, but lend it out and buy volatile assets with it. Depositors are, in fact, the banks’ creditors. Understandably, people are looking for alternatives such as Bitcoin.”
Tětek attributed Silvergate’s downfall to its association with the now-defunct crypto exchange FTX, and SVB’s failure to good risk management. He explained that SVB was heavily invested in long-term treasuries which suffered from the interest rate hikes, but had no protective hedges in place. Additionally, Tětek stated that SVB had no connection to the crypto industry.
Tětek’s comments occurred while Signature Bank board member and ex-U.S. Congressperson Barney Frank asserted that the most recent U.S. banking occurrences have ties to cryptocurrency.
Frank said that regulators wanted to strongly discourage crypto-assets, and the problems at Signature were due to a domino effect caused by SVB.