Bitcoin and the Banking Crisis: Bitcoin Was Made For This

Alex Adelman, CEO & Co-founder of Lolli discusses why the banking crisis highlights bitcoin's core mission, and why it will solidify increased demand for bitcoin.

Bitcoin was made for this moment in history.

In the midst of a global banking crisis, bitcoin is up over 60% year-to-date. While bitcoin was already rising on the winds of slowing inflation in 2023, the collapse of leading banks and the ensuing government bailout caused bitcoin to hit a new 9-month high – notably trading opposite a faltering S&P 500 and Dow, both of which have remained essentially flat year-to-date.

The banking crisis highlights the key issues that bitcoin was created to solve, including the failure of opaque centralized institutions to serve the people and the government’s ability to flood the economy with hundreds of billions of dollars at a moments notice. In this way, the crisis has drawn renewed attention and demand to bitcoin.

Bitcoin’s rally in the midst of the crisis shows that investors are recognizing bitcoin as a secure store of value and a stable alternative to traditional finance in a period of widespread uncertainty. The juxtaposition between bitcoin's strong market position and the weakened traditional financial system underscores bitcoin's role an established store of value and investment alternative.

Rising demand also reflects a sharper understanding of bitcoin as a fundamentally new way of storing and moving money, beyond being a digital currency. Bitcoin operates on a secure distributed network that has securely verified transactions with the regularity of clockwork for over a decade, eliminating the need for third-parties like banks and allowing people to hold and exchange money with completely sovereignty over their wealth.

In this way, bitcoin is effectively the antithesis of traditional banking; its price movements suggest that investors are moving their money into bitcoin with this understanding.

Bitcoin’s rally in the midst of the crisis shows that investors are recognizing bitcoin as a secure store of value and a stable alternative to traditional finance in a period of widespread uncertainty.

Bitcoin was created in the wake of the 2008 financial crisis as a new, peer-to-peer form of digital cash that did away with the need for central intermediaries like banks. Its creator, Satoshi Nakamoto, was disillusioned with the trust-based model of banking that had failed countless times and claimed investors of every size as casualties.

In creating bitcoin, Satoshi crafted a new, entirely trustless, decentralized, and secure model of money that could settle a high volume of complex transactions. Bitcoin reimagined money and created a new way of storing and exchanging value that could remain secure and unperturbed even, if not especially, in the midst of a crisis like the one we are seeing now.

The recent announcement of a $300 billion injection into the economy to save cash-strapped banks is also contributing to bitcoin's upward energy. The intervention has continued to highlight the cracks in traditional banking and the need to seek out a viable long-term alternative.

Bitcoin reimagined money and created a new way of storing and exchanging value that could remain secure and unperturbed even, if not especially, in the midst of a crisis like the one we are seeing now.

Bitcoin is the only store of value that protects people from the systemic failures of banking and traditional finance.

As the crisis continues to unfold, we will see a growing number of people reconsider their money and shift their capital to bitcoin as a superior, secure alternative to traditional finance.

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