Understand the subtle relationship between Bank of America and BTC, and you will know when to buy and sell BTC.

The US is the largest financial market in the world and also an important development area for cryptocurrencies. However, recently the US banking industry has experienced a series of crises, leading to the closure or bankruptcy of several crypto-friendly banks, which have had a profound impact on the crypto market. This article will analyze the relationship between US banks and Bitcoin, as well as possible future trends.

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First of all, we need to understand what crypto-friendly banks are. Crypto-friendly banks are those that provide financial services to cryptocurrency exchanges, projects, institutions and individuals, including deposits, transfers, settlements, loans and so on. These banks usually use innovative technologies and compliant methods to meet the needs and challenges of the crypto market. For example, Silvergate Bank and Signature Bank developed Silvergate Exchange Network (SEN) and Signet Network respectively. These networks can provide 24/7 real-time settlement services for crypto businesses, offering convenience and efficiency.

However, in mid-March 2023, the US launched a sweep against crypto-friendly banks, resulting in three well-known crypto-friendly banks closing or going bankrupt in succession. These three banks are:

• Silvergate Bank: The bank announced bankruptcy protection on March 15th 2023 and stopped all business activities. The bank was once one of the world’s largest cryptocurrency settlement platforms with more than 1,000 customers including Coinbase, Kraken, Bitstamp and other well-known exchanges. The bank operated SEN network which handled billions of dollars in transactions every day.
• Silicon Valley Bank: The bank announced on March 17th 2023 that it would close all its businesses related to cryptocurrencies and terminate its cooperation with all customers. The bank was once one of the most influential technology financial institutions in Silicon Valley, providing funding support and consulting services for many innovative enterprises. The bank also provided deposit services for Coinbase and other exchanges.
• Signature Bank: The bank announced on March 19th 2023 that it would suspend its Signet network and accept investigations from the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC). The bank was accused of money laundering, fraud and violating anti-terrorism laws among other charges. The bank was once the world’s second-largest cryptocurrency settlement platform with more than 500 customers and cooperated with Fidelity Digital Assets and other institutions.

These events have had a huge impact on both the US traditional financial system and the global crypto market:

• For the traditional financial system, these events exposed the lack of effective regulation and guidance capabilities by the US regulatory authorities for emerging financial fields; at the same time they also triggered public doubts and distrust about the stability and security of the traditional financial system; moreover they may also lead to other non-crypto-friendly banks’ credit crisis and liquidity tension.

• For the crypto market, these events also brought positive and negative impacts. The positive impact is that these events increased public attention and recognition for cryptocurrencies, especially Bitcoin, as a decentralized, secure, stable value storage tool that attracts more investors’ favor. According to reports , after the US banking crisis occurred, Bitcoin price returned to above $28k USD, with a 24-hour increase of more than 4%, showing strong rebound momentum. The negative impact is that these events also weakened the infrastructure and service capabilities of the crypto market, causing many exchanges, projects and users unable to perform normal settlement, exchange and withdrawal operations. It is reported that after Silvergate Bank went bankrupt,Coinbase and other exchanges suspended SEN network services,and prompted users to use other methods for transfers.

In summary,the relationship between US banks and Bitcoin is complex and subtle.On one hand,the US banks provide necessary financial support and services for Bitcoin. on another hand,Bitcoin also poses competition and challenges for US banks.In future,the influence factors such as regulatory policies ,technological innovation,and market demand,this relationship may change or adjust.


Post time: Apr-10-2023