Some say the timing was coincidental, but Bitcoin and the entire crypto ecosystem was born seemingly in response to the issues in traditional finance exposed by the 2008’s Great Recession, during which banks holding billions of dollars started to collapse.
Case in point: in the first-ever block of the network, its pseudonymous creator Satoshi Nakamoto embedded the following text into the first block: “Chancellor on brink of second bailout for banks,” a reference to a The Times headline from the morning the block was mined.
As the coronavirus has ravaged the global economy, bailouts have begun yet again as cracks have appear in institutions, leaving many to suggest that Bitcoin will “come of age” in this crisis, as put best by Dan Morehead of Pantera Capital.
U.S. bank fails
Per a report from American Banker published late last week, the Federal Deposit Insurance Corporation (FDIC) has announced the closure of The First State Bank of Barboursville in West Virginia. The bank held $152 million in assets and had four branches, which have been acquired by another local institution.
The FDIC indicated that The First State Bank has “experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015.” The institution also purportedly had capital levels that were too low according to state and federal laws. It also indicated it will be directing a $46.8 million bailout, which will make up for the shortfall.
Although there are no signs that there will be a cascade of closures of larger U.S. banks caused by the coronavirus outbreak or other triggers, many in the Bitcoin space have taken this news.