The recent crisis in the banking sector has reshuffled all the cards regarding the outlook for bitcoin (BTC). Not only is the flagship crypto currently on the rise. But in addition, the current circumstances make possible scenarios like hyperbitcoinization, improbable so far.
Hyperbitcoinization almost here?
Friday, March 31, experts from the Bernstein company spoke about the crisis that recently shook the banking sector. Even if the government was able to quickly salvage the furniture, Bernstein seems to consider it a futile work.
It must be understood that the financial system, banking in particular, is at the end of its rope. A future crisis cannot be ruled out and if it does occur, it will sound the death knell of the monetary system classic.
The impact of this scenario will likely be hyperbitcoinization. That is to say, people will trust bitcoin so much by adopting it massively that they will make fiat currencies disappear.
Concretely, analysts believe that banks are no longer able, as in the past, to survive a bank run. This phenomenon, although in theory perfectly controllable by a bank, is much less so today.
The difficulty is linked to the extreme speed with which information, banking in this case, is disseminated. “Welcome to the new world of high-speed information flows and high-speed bank runs”quipped Gautam Chhugani, Bernstein’s chief analyst.
For him, the banks are now in the grip of a situation for which they were not prepared. This, while having no choice but to migrate to financial services adapted to the needs of a new generation of customers, based on bitcoin.
Several enthusiasts of the flagship crypto believe that the path to hyperbitcoinization is already open. You only have to look at the development of decentralized financial systems (DeFi), based on smart contracts, to be convinced of this.
Moreover, DeFi has the potential to help limit the counterparty risks for customers inherent in the progress of instant payments. “The simplicity of cryptocurrencies as bearer digital assets solves the immediate counterparty risks that bank customers face, but customers also need value stability”wrote Chhugani.
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