Crypto jobs look more attractive in wake of bank failure
The collapses of Silicon Valley Bank and Signature Bank have caused people – in droves – to withdraw their savings from small and regional banks and put the funds into financial institutions and too-big-to-fail cryptocurrency investments. Bank of America, JPMorgan, Citi, Wells Fargo and crypto were the beneficiaries of this banking disaster.
Before the US Treasury Department, the Federal Reserve Bank and the Federal Deposit Insurance Corporation adopted measures to stop the banks, there was a palpable fear of a banking crisis with a significant number of banks closing their doors. The possibility of a large-scale financial contagion supported the arguments of bitcoin and crypto enthusiasts who argued that decentralized systems offer security, since they are not connected to the entire banking and financial system.
As the banking sector was under pressure and the stock market plummeted, bitcoin prices and other leading tokens soared during the tumultuous time. CNBC reported that bitcoin and ether shot higher by roughly 17% and 10% on Monday and Tuesday, respectively. Bitcoin rose to its highest level since last June, jumping to around $26,000. Ether’s value increased as it traded higher to around $1,780. This level was last hit on September 12, when the price rallied ahead of the Ethereum rally. The strength of the digital assets bolstered claims by crypto investors that bitcoin serves as an important alternative to the dollar.
People will turn to crypto-related jobs
The Securities and Exchange Commission announced that it is increasing the number of staff to investigate, audit and investigate cryptocurrency platforms and exchanges. In addition to the SEC, other regulatory and law enforcement entities will conduct their own reviews. Companies in this sector need to proactively employ compliance, legal, risk, audit and anti-money laundering professionals to ensure they are not breaking any rules and laws.
To ensure the safety of the banks and their customers, regulators will require more compliance officers, lawyers, risk officers, auditors and related personnel. Government regulators at the SEC and other agencies will investigate, audit and investigate banks of all sizes to prevent further implosion. They will gain attention to spot bad actors and be recruited away from the lower-paying government agencies into lucrative law firms and management roles in banks.
Big banks will hire to accommodate the influx of new business. As larger rivals gobble up smaller financial institutions, their employees will be laid off as the larger banks already have staff.
If crypto keeps up its momentum, more people will be interested in turning their careers towards this area. They will make the analysis that working for a small bank is too risky and being in a massive bank they will get lost in the crowd. Joining a crypto firm can be an attractive option for people looking to accelerate their careers.
Why Bitcoin and cryptocurrencies can withstand the pressure
Unlike the US banking system, bitcoin performs transactions on a decentralized computer network or distributed ledger via blockchain technology. The DeFi system manages and tracks digital assets and secures the ownership of bitcoin and other tokens.
Bitcoin can mostly operate anonymously without government interference. The absence of a central bank that pulls the levers and makes decisions over the money supply means that the stock exchanges can remain outside the normal financial markets. However, nothing is perfect and the authorities are working on the cryptocurrency sector. The abrupt closure of crypto-friendly Signature Bank raised fears that the US government is trying to undermine this sector.
Cryptos cut off from the financial community
The bank collapses made the digital asset industry look more attractive, but there is reason to be cautious. Politico points out concerns that crypto will be removed from traditional banking, and US regulators, including the Federal Reserve, have warned lenders about the potential risks associated with digital assets. The concerns of crypto investors were confirmed by the closure of Silvergate Bank, Silicon Valley Bank and Signature Bank – all involved in digital assets.
Lingering concerns about the banking system
In the midst of the bank failures, Treasury Secretary Janet Yellen tried to calm the nation’s nerves by saying that “the banking system is healthy.” Yellen, who previously served as chair of the Federal Reserve from 2014 to 2018, told the Senate Finance Committee: “I can assure the members of the committee that our banking system is sound and Americans can feel confident that their deposits will be there when they need them. This week’s actions demonstrate our resolute commitment to ensuring that our financial system remains strong and that depositors’ savings remain safe.”
Despite her efforts to reassure Congress and Americans worried about the safety of their bank accounts, Yellen failed to confirm that smaller banks would receive the same kind of “bailout” that venture capitalists and startups received. The inability to offer comfort to smaller and regional banks raises concerns. If other banks risk imploding due to bank runs, depositors will withdraw their money en masse, creating a contagion effect. Large-scale withdrawals can cripple banks that are not well capitalized. Ultimately, it will lead to a nationwide banking crisis.
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