Accoridng to the latest reports, it seems that there is a trigger that could breathe some fresh air in the crypto markets. Check out the latest reports about this below.
This could trigger new flame in the crypto market
It’s been just revealed the fact that a venture capitalist who correctly called the November 2022 crypto bottom believes that the current crisis in the US banking sector is bullish for the long-term prospects of the digital asset markets.
In a lengthy Twitter thread, Placeholder partner Chris Burniske said the fact that the banking crisis would likely lead to disinflation rather than hyperinflation.
His opinion is that the Federal Reserve’s Bank Term Funding Program (BTFP), which aims to provide liquidity to struggling banks, will not have the same impact as the fiscal stimulus. He is referring at the one directly given to US citizens at the height of the Covid-19 pandemic.
“Current banking crisis is bullish for crypto long run. Short-term we’re likely in the eye of the storm, so expect volatility, but the banking crisis has been monetary policy-induced (too much, too fast with rate hikes) and will be ‘solved’ by monetary policy.”
The same notes reveal this:
“This banking crisis is also more likely to cause disinflation, than hyperinflation, in my opinion. Credit is drying up. BTFP isn’t the same as ‘stimmies’ – stimmies went straight to consumer spending, whereas BTFP is shoring up bank balance sheets which is likely to just sit there.”
Institutions and crypto
Digital assets manager CoinShares said the fact that institutional crypto investment products finally ended their six consecutive weeks of outflows last week in a big way.
In its latest Digital Asset Fund Flows Weekly Report, CoinShares finds that institutional crypto investment products saw the highest inflows in over eight months.
“Digital asset investment products saw inflows totaling US$160m, the largest since July 2022. A marked turnaround following 6 weeks of outflows that totaled US$408m.”
We suggest that you check out the complete data about this in our previous article.