BITCOIN GOING CRAZY

Why is Bitcoin price going up?

The broad answer is simple but we are going a little deeper.

On march 9th bitcoin got down to a little under $20,000. Today, march 14, just 5 days later bitcoin is sitting at $26,000. That is a 30% rise. 30%.

A lack of confidence in the banks since a few have failed recently has pushed people to seek alternative stores of value. This is a knee-jerk reaction, but without even analyzing all underlying factors, this reaction is correct and here is why.

The Fed and the President have both come out to say all customers of Silicon Valley bank will be made whole with the full backing of FDIC insurance even if those accounts have more than $250,000. Typically, $250,000 is the maximum insurable amount under FDIC rules, BUT they are allowed to make exceptions, and in this case, they have chosen to do exactly that. For most, this seems like a good thing, right? Everyone gets to keep their money. Although true, yes they do, this is government again taking care of its own.

This isn’t an ordinary bank. Between 93% and 97% of all accounts at SV bank are above the $250,000 limit. That means only a few percent of accounts had less than this amount. The majority of these accounts were for tech companies or high net worth people. The government is not trying to save normal account holders from losing money. If this was a bank in Kansas where a bunch of farmers and blue collar workers held accounts there would be no FDIC exception. They would just lose their money. Bitcoin is running up in price because people realize another bailout of those who least deserve to be bailed out is coming and they are essentially voting with their dollars, saying I do not believe in this banking system. This system does not represent me.