A new CoinShares report found that digital asset funds saw $160 million in inflows last week, marking a turnaround for cryptocurrency products which had previously been six week in the red.
Bitcoin-based funds received the highest portion of inflows at $120 million. Notably, short Bitcoin products (i.e. products betting against the US-Dollar price of Bitcoin) also saw robust inflows of $30 million. The increase in flows could be due to a lack of interest in the traditional financial sector in the wake of a wave of significant bank collapses.
Banking collapse
On March 10th, a bank with $200 billion in assets under management went to zero (SVB) overnight. As covered by former Coinbase CTO and analyst Balaji on Twitter, the following events have taken place since then:
- Federal Reserve organise an emergency meeting to bail out domestic banks.
- $2T are estimated to have been printed.
- $18T are estimate to be needed to back all deposits.
- 186 banks are reportedly insolvent, per WSJ.
- $500 billion were wired from banks, seeking safe havens.
- $150B+ in funding increased in the ‘discount window’, more than in the 2008 financial crisis.
- ~$400B were printed in days, reversing a year and a half of the quantitative tightening regime.
- Another emergency Fed swap lines created to bail out foreign banks.
- Joint statements released from US authorities: US banks are “resilient”
- 5 dead banks confirmed, including too-big-to-fail Credit Suisse (top 7, globally)
- Deutsche Bank potentially at risk of failure.
- Charles Schwab potentially at risk of failure.
- Janet Yellen has an emergency meeting on Friday (FSOC).
- More statements that banks in the US are “resilient”.
- This was followed by a statement that “further actions may be necessary”.
References to the sequence of events are available here.
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