The Federal Deposit Insurance Corporation (FDIC) chairman warned of further downside risks from inflation and high interest rates, which could signal the possibility of another US banking crisis. In early March 2023, bitcoin price saw a much-needed surge thanks to the fear, uncertainty, and doubt surrounding the collapse of the Silicon Valley Bank (SVB).
Also read: BTC Price: Bloomberg Strategist Predicts Key Levels For Recovery Strength
Significant downside risks for the banking industry
US FDIC Chairman Martin Gruenberg warned that the banking sector remains subject to significant downside risks from inflation and high interest rates, which could further weaken profitability and credit quality. The US banking sector was rocked by fear and uncertainty in the first quarter as account holders rushed to withdraw funds from their accounts as the Silicon Valley Bank and Signature Bank run-ins unfolded.
At the same time, the crypto market benefited from significantly rising BTC prices as investors prioritized riskier assets like Bitcoin over volatile financial markets. Deposits fell for the fifth straight quarter as uninsured account holders left the banks. This, in turn, weighed on banks’ profitability as they chased customers in search of better returns.
Possibility to buy Bitcoin?
While concerns about the commercial real estate sector are also growing, the US banking sector could likely be on the cusp of another crisis as we enter the fourth quarter. Therefore, at current prices, BTC could present a good buying opportunity.
Also read: Crypto companies are being given more time to comply with UK regulations
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