Crypto dipped to begin May as investors bet that First Republic’s failure and subsequent takeover by JPMorgan Chase would bring an end to the regional banking crisis. However, the havoc in the banking sector that has been pushing bitcoin higher for the past two months is “nowhere near an end,” and bitcoin should stay resilient for many months to come, according to Bernstein analyst Gautam Chhugani. “Bitcoin and the crypto financial system were made exactly for times like today,” he said in a note Monday, highlighting the “breakdown of traditional financial systems” and “first principle questions on the fractional reserve business model of banks.” “Crypto was not simply a bubble of the low-interest era (maybe it temporarily was),” he added. “Crypto is emerging as a solution amidst economic breakdown and an alternative to centralized money systems.” Additionally, there’s an increasingly bearish narrative building around the dollar, thanks to concerns about the “ballooning” debt of the U.S. government and a decreasing reliance from other countries on the U.S. dollar as the world’s reserve currency, the analyst said. “As the narrative towards a weaker dollar picks up, we believe bitcoin will emerge again as a faster horse than gold,” Chhugani said. “Further, we believe it will also unleash a new crypto cycle, bringing about a new wave of innovation in crypto-based decentralized financial systems. Furthermore, the regulatory argument against crypto in the U.S. is weakening, according to the analyst, as Europe and Hong Kong take more progressive approaches. BTC.CM= YTD mountain Bitcoin (BTC) this year Bitcoin fell about 4% Monday, according to Coin Metrics, after closing out its fourth positive month in a row with a 3% gain. It’s up about 70% for the year.
