Is hyperinflation about to send bitcoin to $1m? + Sony tests cross platform NFTs!
Overview
190 US Banks at risk of insolvency.
Markets: BTC shows strength during the banking disaster.
Bitcoin to $1m due to hyperinflation?
DefiLlama experiences internal turmoil.
NFTs: Sony is testing NFTs for cross-game platforms.
Good Morning Banter Fam,
The US banking solvency issue is far from being solved, and the recent collapses of Signature Bank and Silicon Valley Bank may be the tip of the iceberg.
This analysis by economists has revealed that almost 190 banks in the US are potentially at risk of a bank run due to rising interest rates that put a stranglehold on bank liquidity. The Silicon Valley Bank collapse highlighted the fragility of the traditional financial system. The recent decline in bank asset values is a perpetual cycle that increased the vulnerability of the US banking system to uninsured depositors.
It's no wonder the recently created Bank Term Fund Program (BTFP) injected an estimated $300 billion of liquidy to help stave off a complete banking collapse in one week. JPMorgan analysts predict that the number could rise to $2 trillion.
Market update 🌍
Bitcoin Analysis
BTC overcame the pesky $25,000 resistance level late last week after insolvency issues with US banks fueled the asset to its largest weekly gain (27.1%) since 2018. Bitcoin thrives when liquidity is introduced into the monetary system, and the recent BTFP program provided markets with a $300 billion injection in a week. BTC completed the weekly candle at $27,972.
High-resolution chart.
Newswatch 📰
Bitcoin to $1m in 90 days? The former CTO of Coinbase, Balaji Srinivasan, has taken out a bet with pseudonymous Twitter user James Medlock as to whether bitcoin will reach $1m in a mere 90 days from now! That is by June 17th. Initially James Medlock tweeted that he would bet anyone $1 million dollars that the US would not go into hyperinflation. The former Coinbase executive accepted the bet. The terms of the bet are as follows: if BTC’s price fails to reach $1 million by June 17, Medlock wins $1 million in USDC and 1 BTC. But if BTC reaches $1 million by then, Balaji gets the 1 BTC and the $1 million in USDC.
DefiLlama forked amidst internal conflict. DefiLlama has been forked by one of its employees due to a dispute over plans to launch a token without employee support. The employee, 0xngmi, accused DefiLlama's founders of a "hostile takeover" and said they were starting fresh on llama.fi. Llama Corp., the parent company of DefiLlama, has noted that 0xngmi and a few team members have gone rogue and are looking to seize DefiLlama IP and community while inaccurately claiming the rightful owner to be performing a hostile takeover.
News tidbits:
Warren Buffet in contact with Biden team on banking crisis.
UBS to purchase Credit Suisse.
Euler Finance hackers send ETH to North Korean address.
Microsoft browser Edge testing Web3 wallet integration.
NFT & metaverse update 🐵
Blur under scrutiny for potential market manipulation.
Patent reveals Sony is testing cross-platform NFTs and blockchain technology in its games.
Banter’s take
The recent banking collapse has revealed the uncomfortable reality that the Federal Reserve and the US President initially underplayed the gravity of the situation. Despite being perceived as an isolated incident, analysts discovered that the contagion had affected hundreds of banks. The magnitude of the problem can be deduced from the staggering numbers alone. The BTFP program has already wiped away nearly $300 billion from the Fed's balance sheet in just a week.
The financial system has been shaken to its core by these events and exposed to its inherent weaknesses. The dependence on leverage renders the system highly vulnerable in times of crisis. With the government's readiness to intervene, it begs the question, why even follow stringent risk management if you're a bank?
Despite the uncertainty, there is a silver lining. The money printer will likely bail out the banks and inadvertently increase the value of our bitcoin investments over time, as the Bitcoin maxis have been prophesying all along.
Gabriel
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