Cathie Wood, CEO of Ark Invest, posted a thread on her Twitter account commenting on the recent instability in the banking system. She noted that the prices of the two leading cryptocurrencies rose as a result.
Elon Musk, the tech billionaire and boss of several leading companies, including Twitter, weighed in with comments.
Slamming regulators for blocking cryptocurrency platforms
Cathie Woods said that while the U.S. banking system failed, the two major cryptocurrencies, Bitcoin and Ethereum, as well as other cryptocurrencies in the market, took advantage of this and “didn’t skip a beat.”
Bitcoin, Ethereum, and other cryptocurrency networks are not missing a beat when the U.S. banking system is bogged down as a bank run threatens regional banks. Instability in the banking system threatens stablecoins, the onramp to DeFi, in stark contrast to regulators’ rhetoric https://t.co/r5xwC96Pdj
– Cathie Wood (@CathieDWood) March 15, 2023
Bitcoin reached an impressive local peak, surpassing the $26,000 level for a brief period, gaining more than 17% for the week. It then fell 5%. Ethereum price also rose 20.26% since the weekend to $1,776 but is now down to the $1,689 level.
However, Woods mentioned that the instability of the banking system with the collapse of three major (crypto-friendly) banks, two of which were bailed out, poses a threat to the USDC stablecoin. It also affected TUSD, BUSD and USDP.
Elon Musk steps in, backs Woods
Additionally, before the crisis began, SEC regulators sued Kraken and Gemini exchanges for cryptocurrency lending services, and the New York Attorney General filed a lawsuit against KuCoin exchange, claiming that Ethereum is a security.
Instead of attacking “decentralized, transparent and well-functioning” financial platforms that have no central point of failure, regulators should address weaknesses in the traditional banking system, according to Wood. Wood pointed to clear signs of a crisis looming, similar to the crisis of the 1920s, perhaps referring to the Great Depression that hit the United States in 1929.
Twitter CEO Elon Musk commented that the situation in banks now is very similar to that in 1929.
This year has many similarities to 1929
— Elon Musk (@elonmusk) March 15, 2023
Robert Kiyosaki on the collapse of three top banks
The three banks mentioned above are Silvergate, Silicon Valley Bank and Signature Bank. All three have worked with cryptocurrency companies such as exchanges. Signature Bank is also partnering with Paxos, the issuer of the BUSD and USDP stablecoins. Ripple CEO Brad Garlinghouse also issued a statement on Twitter saying that the company’s exposure to Signature Bank is minimal. However, the failure of the latter will not affect Ripple’s day-to-day transactions.
Prominent investor and author Robert Kiyosaki predicted the collapse of Signature Bank on Saturday, saying two major banks have already failed and a third is poised to follow suit, USA TODAY reported over the weekend. He did not specify which bank it was.