The recent collapse of major banks in the United States and the need for federal intervention have reignited discussions to identify the most effective ways to protect crumbling economies. Comparing the episode to the financial crisis of 2008, the eminent economist Peter Schiff found that the increase in banking regulation contributed to the worsening of the financial crisis.
Further analysis of Silicon Valley Bank (SVB) by a group of economists found that nearly 190 banks in the United States were at risk of a depositor-induced collapse. It was pointed out that monetary policies made by central banks could harm long-term assets such as government bonds and mortgages, creating losses for banks.
The financial crisis of 2008 was caused by the collapse of the real estate market. However, Schiff believed the crisis was caused by “too much government regulation”.
Schiff pointed to how the US government introduced new banking regulations after the 2008 financial crash while promising that “what is happening now will never happen again.” He added:
“But one of the reasons we had the financial crisis of 2008 was too much government regulation. That’s why this crisis will be worse.
Finding the right balance between regulation and banking institutions is important to Schiff, given that Puerto Rico regulators shut down Schiff’s bank not so long ago, July 04, 2022.
At the time, Schiff was reminded by Crypto Twitter why millions of people around the world are vouching for the adoption of Bitcoin (BTC) in the quest for financial freedom.
Related: SVB confusion compels India’s SVC Bank to issue Clarification Notice
On the other end of the spectrum, crypto entrepreneurs have started doubling down on Bitcoin’s epic comeback. Former Coinbase CTO Balaji Srinivasan predicted that Bitcoin would hit $1 million in value within 90 days.
As Cointelegraph reported, pseudonymous Twitter users James Medlock and Srinivasan made the bet based on their different visions for the future of the US economy amid continued uncertainty about the country’s banking system.
Srinivasan’s bet revolves around an impending crisis that will lead to the deflation of the US dollar and take the price of BTC to $1 million.