Introduction:
Is the future Crypto or Bank?
Is the future of the bank a Crypto, or is it just another technology trend that will co-exist with traditional banks?
Gaining acceptance of Cryptos worldwide and existing banking failure is undoubtedly raising the case for Cryptos replacing traditional banks soon.
The regulatory nature of traditional banks makes them reliable amongst depositors worldwide, while the opposite unregulated nature of crypto is unsafe for most of the population.
Traditional bank existence can be traced back 100 years back. At the same time, crypto, in comparison, is dated back 12-15 years old, hence why people believe in the traditional bank over crypto. Read more here Use of Blockchain in energy trading and grid management
What caused Silicon Valley Bank’s failure?
The expansion of American technology businesses was crucial for Silicon Valley Bank’s success. Several of these businesses experienced an upsurge in interest in their activities during the COVID-19 epidemic, which led to a spike in bank deposits. SVB placed a sizable percentage of the assets it was managing in US government bonds, often considered low-risk investments.
The crypto industry experienced significant growth and expansion before the covid-19 struck the world. It was noted that all cryptocurrencies’ market cap reached an all-time high of around $800 billion dollars in early 2018.
In addition, the crypto industry was experiencing a wave of innovation, with new technologies and use cases for blockchain. The overall trend was one of growth and progress.
Then the covid-19 arrived, bringing all traditional financial assets like stocks, real estate, and gold down to its knee, and so was the case with cryptocurrencies. It was worse for cryptos, with significant digital assets like Bitcoin seeing a sudden drop in value of around 50%.
While traditional banks were enjoying a stable economic environment and making profits years after the 2008 crash, there was increasing competition and disruption from fintech start-ups.
Covid-19 challenges:
The virus covid 19 was stalled throughout the world. In this bank was also included. It was just a challenge for remote work. As a result, all banks and other organisations were shifted to work online. Such banks that are still unable to improve their digital games were facing varios problem in their daily operations.
Meanwhile, the cryptos’ ability to felicitate secure and remote transactions started garnering attention. In addition to this, many younger populations worldwide started to take a keen interest in crypto trends and invested their money buying various cryptocurrencies. This made financial institutions take serious notice of the crypto industry and open themselves to working with it.
Three years since covid-19 crash:
After covering so many of the waves, the situation is now somewhat stable at some point. Hence, people are again getting back to their duties. As a result, these currencies were utilized quite differently from last 3 years since covid. It has been found that cryptocurrencies is rising its demand day by day. But during covid banks had various problems to deal with this situation still they handled it.
Bitcoin the most popular cryptocurrency used today. Today it is at a biggest height in the entire market. Many researches found that it attained this height only becuae if the new technology developments. Some new technologies were introduced like NFTs and DeFi.
However, traditional banks continue to face post-pandemic challenges of adapting to the digital way of doing financial operations along with new technological advancements in the crypto world and changing consumer behaviour all contributed to banks’ decline.
Major financial institutions like JP Morgan have announced several plans to offer cryptocurrency-related products and services, while other banks resorted to partnerships with crypto companies like Coinbase to offer new products and services.
Conclusion:
The covid-19 crash had a significant impact on both the crypto industry and traditional banks. While continuous innovation by the crypto industry has made it resilient in the face of the pandemic, the same is not true for traditional banks. The competition from several quarters like fintech start-ups, economic uncertainty, and traditional way of operation has been currently hampering banks’ operations.
Although many banks have begun to accelerate their digital transformation efforts along with in-house technology innovation and smart collaboration with the fintech
and cryto industry.
Hence NFTs are established as a new means if technology. But the covid 19 from last 3 years cleard and crypto industry. For investment and trading check Bitcoin smart.
