Bernstein experts have warned that further financial crises might clear the way for hyper-bitcoinization.
Bernstein experts believe any other errors could prove decisive for bitcoin, and the recent financial problem is evidence of this.
Bernstein analysts headed by Gautam Chhugani remarked, “Welcome to the new world of hyper-speed information flows and hyper-speed bank runs,” referring to the social media frenzy that contributed to escalating tensions before the shutdown of Silicon Valley Bank.
Nearly $120 billion left regional banks in the week ending March 15, with over half of that going to big institutions. By March 19, the crisis had reached Europe, and UBS had purchased long-time competitor Credit Suisse for a price.
According to Chhugani, this is a danger that banks “never fathomed” before. Instant payment systems, such as the FedNow platform debuting later this year by the Federal Reserve, will soon make hyper-fast withdrawals possible by giving financial organizations of any scale access to payments in real-time, around the clock.
Bernstein argued that cryptocurrency could help mitigate the risks associated with the new age of hyper-speed deposit withdrawals, in which customers face risks from unidentified counter-parties.
As Chhugani put it, “customers also require stability of value,” even though “the simplicity of crypto as digital bearer assets solves for the immediate counter-party risks that bank customers are dealing with.”
Customers who place a high value on the dollar’s security may not be interested in Bitcoin right now, but that could change.
Investors should watch for the “real value” of the government money and its numerical value “as we head towards another pivotal moment in monetary history,” he said.
Such a future has been proposed as the “final path to hyper-bitcoinization” by some dedicated bitcoin supporters.
The finance firm claimed that the advantages of decentralized financial systems based on smart contracts would become immediately apparent as “built for this world.”
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.