The recent collapse of the major banks in the United States and the need for federal intervention sparked discussions to identify the most effective ways to protect the crumbling economies. Comparing the episode to the 2008 financial crisis, prominent economist Peter Schiff found that increasing banking regulations contributed to the worsening economic crisis.
A deeper analysis of Silicon Valley Bank (SVB) by a group of economists revealed that nearly 190 banks in the United States are at risk of a depositor-driven collapse. It was highlighted that central banks’ monetary policy could damage long-term assets such as government bonds and mortgages and create losses for the banks.
The financial crisis in 2008 was primarily driven by the collapse of the housing market. However, Schiff believed that the crisis was caused by “too much government regulation.”
Schiff highlighted how the US government imposed new banking regulations after the 2008 financial crash, while promising “what’s happening right now would never happen again.” He added:
“But one reason we had the financial crisis in 2008 was too much government. regulation. That’s why this crisis is getting worse.”
It is important for Schiff to find the right balance between regulations and financial institutions Puerto Rico regulators shut down Schiff’s bank not so long ago, on July 4, 2022.
At the time, Crypto Twitter reminded Schiff why millions of people worldwide are advocating Bitcoin (BTC) adoption in pursuit of financial freedom.
Related: SVB mix-up forces India’s SVC Bank to issue clarification notice
At the other end of the spectrum, crypto-entrepreneurs have begun to double down on Bitcoin’s epic comeback. Former Coinbase CTO Balaji Srinivasan predicted that Bitcoin would reach $1 million in value within 90 days.
As Cointelegraph reported, pseudonymous Twitter users James Medlock and Srinivasan made the bet based on their differing views on the future of the US economy amid ongoing uncertainty about the country’s banking system.
Srinivasan’s bet revolves around an impending crisis that will lead to the deflation of the US dollar and bring the BTC price to $1 million.