US Fed to bail out banks as Bitcoin soars

What’s in the news these days is the Fed’s action to prop up the banking system which is seriously in crisis, even though this only props up Bitcoin.

The banking crisis with the failure of four major US banks, and others at risk. Has forced the Fed and the government to take unprecedented action and this is also indirectly giving new life to Bitcoin.

Fed’s extraordinary measures

As also reported by Watcher Guru on Twitter with the following tweet:

“JUST: $2 Trillion Could Be Injected into US Banking System by Federal Reserve’s Emergency Loan Program, JPMorgan Says.”

The Fed’s emergency loans consist of distressed banks’ ability to access at least $2 trillion in liquidity, JPMorgan explains.

The aftermath of the collapse of the various Silicon Valley Banks, Silvergate, etc. has sunk the entire banking industry and fear is spreading like wildfire.

Many banks do not have their accounts in order and are not as solid as, for example, Silicon Valley Bank was, although it also went bankrupt.

For the investment bank JPMorgan Chase & Co, the program initiated by the Fed and the US government is massive.

Available funds constitute the largest economic intervention ever in place ($2 trillion) and are intended only to buffer the crisis with an injection of liquidity.

The plan had been under consideration well before the recent industry failures, but now its urgent launch was necessary to avert the collapse of the US economy.

The operation will make it unnecessary to sell loss-making securities so that the banks can survive.

JPMorgan has stated that the Bank Term Funding Program will be sufficient to put the accounts of the entire banking system in order except for the 5 largest investment banks.

There are strong doubts as to whether the plan will be used or not, since it will involve loosening the state with a noose around its neck.

The amount allocated on the balance sheet is equal to the sum of total existing bank bonds.

For Nikolaos Panigirtzoglou’s strategy team:

“Utilization of the Fed’s Bank Term Funding Program is likely to be high.”

The largest US banks, along with those subject to Fed and government intervention, hold $3 trillion in bank reserves.

The Fed is thinking about prices and Bitcoin benefits

There have been rumors for a few days now that the Fed no longer intends to raise interest rates by 50 basis points. There has even been talk of a rate stand-by.

This news, combined with the banking crisis, has led to, among other things, A drop in the yield on robots of 60 basis points in just one week.

The combination of the banking crisis and the idea of ​​an interest rate standby gives Bitcoin a boost. Which is up 20% in just four days.

Today Bitcoin stands at $24829 and is up 1.89% in 24 hours.

Should Bitcoin succeed in breaking through $26,000, the target of $30,000 will be within reach.

Lack of confidence and losses from investors in the banking sector have brought liquidity to the crypto sector and especially to Bitcoin.

It is curious (I am being sarcastic) how the currency that was created to counter and provide an alternative to the banking system as we know it appreciates in a crisis phase in the latter.