Experts point to bitcoin’s appeal amid banking crisis

Turbulence in the banking system has led to a shift in investors’ views of safe assets. Custodia Bank CEO Caitlin Long told CNBC that more market participants now regard bitcoin as such.

«Many have come to recognise the instability of banks, turning for the first time to the first cryptocurrency. It is a scarce asset which, like its peers, serves as a hedge against instability in the financial system», she explained.

ARK Invest analysts in information bulletin reminded that cryptocurrencies could potentially offer an alternative to traditional banking.

«Against the backdrop of the crisis in financial institutions in the US and Europe, the rise of bitcoin suggests that lax regulatory oversight has had no impact on the decentralised, transparent and verifiable ecosystem of digital assets. On the contrary, digital gold and other cryptocurrencies stand as safe havens», the document says.

Demand for more transparent, auditable and decentralised financial services has surged as digital assets address the core problems of opacity and regulatory shortcomings of TradFi, the experts added.

CoinShares analyst James Butterfill told Decrypt that bitcoin has not ceased to be one of the safe havens. Alongside gold it has shown stellar results amid expectations for the end of the aggressive rate-hiking cycle.

The analyst attributed bitcoin’s past weakness to its sensitivity to monetary policy, a trait also characteristic of other safe-haven assets.

Kaiko’s Head of Research Klara Medalie noted the rise in the correlation between traditional gold and digital gold to the highest level since January. She pointed to the growing number of hodlers as evidence of bitcoin’s acceptance as a store of value.

Earlier, BlockTower Capital founder Ari Paul named gold and the first cryptocurrency as a hedge against the collapse of traditional finance.

Earlier, the author of the bestseller ‘Rich Dad, Poor Dad’ and entrepreneur Robert Kiyosaki came to similar conclusions.