FDIC Urges People to Not Pull Money Out in a Desperate Attempt to Avoid A Bank Run

In the past weeks, investors have fled out of risky assets that resulted in equities, oil, cryptos to even gold and bonds falling in prices. The risky assets along with traditional safe haven assets were left out in favor of cash.

As usually happens in times of crisis, investors turn to hoard cash by selling everything they can get their hands on. However, people stockpiling indicates a cash crisis might be brewing. Interest rate cuts to zero percent and even in negative territory isn’t helping the case for banks either.

Yesterday, the Federal Deposit Insurance Corporation took to Twitter to advise people against withdrawing money and hoarding, cash emphasizing that “the safest place to keep your money is in the bank.”

In this less than a minute long video, FDIC talks about how in the current unprecedented times of novel coronavirus, people are fearful about what they should be doing with their money when they needn’t be because “your money is safe at the banks.” FDIC said,

“The last thing you should be doing is pulling your money out of the banks now thinking it is going to be safer someplace else. You don’t want to be walking around with large wads of cash and you certainly don’t want to be hoarding cash in your mattress. It didn’t pan out well for so many people.”

The corporation said, “no depositor has lost a penny of their insured deposits since 1933 when the FDIC was created,” as such “if you’re talking about having your money in a safe place, please keep it in an FDIC-insured bank.”

“You nervous about something?” is what Nik Carter of Coin Metrics responded with.

Bank Runs

In times of economic hardship, everyone makes a dash for cash and this time as it is happening, banks are struggling to provide liquidity.

According to reports, the likes of Bank of America, JPMorgan, and Chase are limiting the withdrawals. These banks have capped the limit between $3,000 to $10,000 in some of the areas.

“We don’t keep large amounts of cash in big bills in the branches because it’s dangerous for our employees and there is low demand,” said BoA.

However, there are no such limits on withdrawing crypto, as long as you are the one that owns your keys. But during the recent market carnage, the fact that cryptos also crashed hard has some in doubt.

However, it must be noted that so did gold just like it fell in 2008 during the financial crisis but only to emerge as the winner. And the same is expected of the deflationary Bitcoin with a hard cap of 21 million, unlike the US Dollar, that the Federal Reserve keeps on printing more and more.

As BitMEX in its recent report noted, “Where the Bitcoin price may shine is in the volatile inflationary aftermath of the response to the crash.”

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Author: AnTy

Bitcoin Price to $9k ‘Inevitable’ But What Will Confirm the Next Big Uptrend?

  • Jump in BTC price resulted in Bitcoin futures recording $25 billion in volume, OI surged 15% to reach $3.5 billion & options volume on Deribit Exchange spiked 500%
  • Crypto Twitter feeling very bullish, a vast majority think 2020 high will be above $20k
  • “New year, new money, (or) new enthusiasm,” what got the altcoins going?

Yesterday BTC jumped about 10% to cross the $8,900 level. Altcoins, however, pumped harder than Bitcoin.

While former hedge fund manager Mike Novogratz isn’t sure what brought on this altcoin rally, if it was “new year, new money, (or) new enthusiasm,” It could just be the lack of liquidity in altcoins or “closely held BTC forks” that makes it very easy to pump them and drag the entire market up. Saifedean Ammous, author of The Bitcoin Standard notes,

“Altcoins have approximately zero liquidity, so when Bitcoin starts to rise, it only takes a little bit of money seeking “diversification” to make altcoins rally. As alt liquidity rises & their numbers swell, the effect dissipates.”

However trader Josh Olszewicz says for Litecoin (LTC), EOS, Zcoin (ZEC), and Ethereum Classic (ETC), it was a matter of technicals. Six month accumulation period after two-year downtrend combined with growing bullish divergence on RSI for most of the higher caps, and favorable trend metrics (Cloud/EMAs) drove the price up.

Volume Jumped Across the Board

Although the world’s leading cryptocurrency couldn’t sustain this level, along with price the volume across the board saw a substantial jump too.

According to crypto analytics firm Skew, Jan. 14 was the most active session of the year for Bitcoin futures. It has actually been the busiest one since Oct. 26. The company recorded over $25 billion in Bitcoin futures trading volume.

When it comes to open interest, it surged 15% to reach $3.5 billion on all the bitcoin derivatives exchanges combined.

The options volume on Deribit Exchange, the dominant force in the bitcoin options sector, saw an increase of 500% yesterday.

Crypto Twitter is Feeling Very Bullish

Bitcoin’s 10% rally in a day and nearly 19.50% gains YTD have turned the Crypto Twitter extremity bullish as can be seen in the result of the poll run by economist and trader Alex Kruger.

Over 47% of the 4,079 respondents think the high of 2020 will be above $20,000. It is followed by the $14k to 19k and then below $11,500.

The bracket price of $11,500 to $14,000 that received the least votes, 10.5%, is however, Kruger’s personal educated guess, the level he sees BTC topping this year.

What’s to Come?

After climbing to $8,900 yesterday, Bitcoin is currently trading at $8,747. As Bitcoin takes a rest with volume dragging down, altcoins have started cooling off as well.

According to investor and trader Josh Rager, $9,400 is the significant area for BTC to take as it held support for June-Sept. range. The next important level is $10,350 which is the point of control. At this price point, the highest volume was traded from May to Dec. He said,

“Breaking $10,350s, IMO, will confirm next big uptrend with 5-digit BTC for months to come.”

Meanwhile, trader CryptoSqueeze believes $9k is coming.

“BITCOIN CANT STOP WONT STOP. I think 9k is inevitable at this point. Back in my long. I’d be more concerned of not having a long than trying to time the dip.”

While many are still bullish…

Some are not feeling this rally…

The rally had BitMEX registering its highest daily funding rate yesterday since 11/6 but analyst Rptr45 notes, this was where “it subsequently sold off ~20% in the next 20D.”

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Author: AnTy