Should I deposit money in bitcoin or in a bank?

Three banks collapsed in less than a week. U.S. government officials have tightened stop losses to prevent further panic. The real concern is whether it was the right move – effectively saving two ailing institutions facing high levels of irregularity and letting a third fail – and the risk of more bank failures.

So, should you take your money out of the bank and keep it safe under your mattress or in Bitcoin? The answer is that if you’re anything like me, the Federal Deposit Insurance Corporation (FDIC) will insure you up to $250,000 no matter how much money you have in your checking account. So, no, JPMorgan is unlikely to buy you off.

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There are sound arguments for stepping in and preventing a catastrophic hit to the valuable U.S. tech industry. Taxpayer money is not being used (at least not directly), deposits of growing businesses are safe, shareholders and bondholders are not being bailed out, and even the New York Times is calling for the recovery of SVB executives’ compensation and stock sales.

And, yes, there are good reasons for letting SVB and Signature go their own way. The expected losses are almost certainly overstated. A sound startup that could have raised money and banked elsewhere would have brought the fear of God back into the so-called capitalist American economy.

But not bailing out SVB and Signature was never an option. Bank failures today are extremely rare and cause huge panics, such as how the collapse of Silvergate Bank – essentially a free-floating entity independent of the wider economy – led to the collapse here. And with both SVB and Signature bobbing on the wave of cheap money created by Fed policy, to what extent can private and public interests be separated?

So, should you keep your money in the bank if the U.S. government officially bails out the banks?

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