‘Economic And Financial Catastrophe—Yellen Issues Stark $31.4 Trillion Warning After Bitcoin, Ethereum And Crypto Price Boom

Update 8/5 below. This post was originally published on May 6.

Bitcoins Bitcoins Ethereum and cryptocurrencies are back in prominence this year due to the impending regional banking crisis in the United States.

subscriber He is now a crypto-assets and blockchain advisor at Forbes and has managed Bitcoin and Cryptocurrency Markets.

Bitcoin's price has more than doubled since hitting a low of $15,000 per bitcoin late last year, despite the stern warning from co-founder Vitalik Buterin, and it's joined by the second largest, Ethereum.

Another Ethereum co-founder, Charles Hoskinson, who is now starting to create Ethereum competitor Cardano, saw the banking crisis that led to the creation of Bitcoin in 2015. He warned that it would be worse than the 2008 global financial crisis.

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In a Doomsday Scenario Forbes - JPMorgan Looks at US Banks Bitcoin Crisis After $300 Billion Spike in Ethereum and Crypto Prices by Billy Bambrough

“In 2008, we had $373 billion in debt,” Hoskinson, Buterin, Joe Lubin, and five others who created Ethereum told Mann Fox Business in 2014, referring to the combined $373 billion in assets held by the failed banks. in 2008.

Cardan He said Created in 2016, Hoskinson is the world's seventh largest cryptocurrency with a market cap of $13 billion, behind Bitcoin at $566 billion and Ethereum at $232 billion.

“I think we are now more than $540 billion in the crisis of 2023. We are just getting started. When you push a little bit, the whole business model will collapse and you will lose these institutions like Silicon Valley Banks and they will become very politicized and they will become very globalized.”

Update 05/8: US Treasury Secretary Janet Yellen has warned that the US is in a "constitutional crisis" if the US$31.4 trillion debt limit is not raised. "If Congress can't do its job, there are no good elections," Yellen said in an interview with ABC .

US lawmakers are deadlocked over raising the debt ceiling, which Yellen has warned could be breached by June 1. This week, Bidan is expected to hold talks with congressional leaders to resolve the crisis.

"Otherwise, we will face an economic and financial disaster on our own, and President Biden and the US Treasury did nothing to prevent that disaster," he said.

In March, a sudden surge in deposits from Silicon Valley Bank and Signature Bank forced the Federal Reserve to step in with emergency action, but the panic spread to Credit Suisse in Switzerland, which rival UBS had to bail out.

This week, the First Republic Bank was taken over by regulators FRC And he sold his assets to JPMorgan, the largest US bank by assets.

“Our government has asked us and others to escalate the situation,” said JPMorgan CEO Jamie Dimon, who played a key role in the 2008 financial crisis. Wells Fargo said depositors would see a 3% increase in net deposits after the deal. WFC extension analyst.

"What happens is 'too big to fail' leads to even bigger institutions," Hoskinson said. "We saw this story in 2008. It will happen again. I don't think anyone wants to see it."

The 2023 banking crisis was prompted in part by a series of rapid Fed rate increases last year, which were raised this week to levels not seen before 2008 to curb rate hikes.

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More From Forbes 'New Market Demand': Fed May Cause Bitcoin's $100 Billion Explosion as Ethereum Returns by Billy Bambrow

Others warn that the banking crisis could spiral out of control if confidence in the system is restored.

"Trust in financial institutions built over decades has been destroyed in a matter of days. As each domino falls, the next weak bank begins to unravel," Bill Ackman, CEO of the hedge fund, wrote in New York's Pershing Square.

"We are running out of time to fix this. How many unnecessary bank failures do we have to see before the FDIC and our government wake up? We need comprehensive deposit insurance now."

The banking and economic crisis Learn about Kevin Report No. 63 [26/3/23]