The recent fall of major banks in the United States and the need for federal intervention reignited discussions to identify the most effective ways to safeguard the crumbling economies. Comparing the episode to the financial crisis of 2008, prominent economist Peter Schiff found that increasing banking regulations contribute to the worsening economic crisis.
A deeper analysis of Silicon Valley Bank (SVB) by a group of economists revealed that nearly 190 banks in the United States are at risk of a depositor-driven collapse. It was highlighted that the monetary policies penned down by central banks could hurt long-term assets such as government bonds and mortgages, creating losses for banks.
The 2008 financial crisis was primarily driven by the collapse of the housing market. However, Schiff believed the crisis was caused by “too much government regulation.”
Schiff highlighted how the U.S. government introduced new banking regulations after the 2008 financial crash while promising “what is happening right now would never happen again.” He added:
“But one reason we had the 2008 Financial crisis was too much Govt. regulation. That’s why this crisis will be worse.”
Finding the right balance between regulations and banking institutions is important for Schiff, considering that Puerto Rico regulators closed down Schiff’s bank not too long ago, on July 4, 2022.
At the time, Crypto Twitter reminded Schiff why millions of people worldwide vouch for Bitcoin (BTC) adoption in the quest for financial freedom.
Related: SVB mixup forces India’s SVC Bank to issue a notice of clarification
On the other end of the spectrum, crypto entrepreneurs have started to double down on Bitcoin’s epic comeback. Former Coinbase chief technology officer Balaji Srinivasan predicted that Bitcoin would reach $1 million in value within 90 days.
As Cointelegraph reported, pseudonymous Twitter users James Medlock and Srinivasan made the wager based on their different views of the U.S. economy’s future amid ongoing uncertainty regarding the country’s banking system.
Srinivasan’s bet circles around an impending crisis that will lead to the deflation of the U.S. dollar and take the BTC price to $1 million.