Amid Banking Industry Turmoil, 50% of Americans Fear the Inability to Withdraw Money

• Nearly 50 percent of Americans have moderate to high concerns over the state of the current banking system in the US and have gained exposure to crypto.
• Investors’ exposure to Gold and Bitcoin has shot up significantly this year in the wake of the banking crisis.

Amid the unfolding banking crisis in the United States, Americans have been strongly losing their trust in the traditional banking systems to keep their deposits secure. As per the recent survey conducted by Gallup, 48 percent of Americans stated that they are losing trust in their funds kept in banks and other financial institutions.

Of the total number of people expressing their worry, 29 percent said that they were “moderately worried” while 19 percent said that they are “very worried”. However, the other half of the participants didn’t express much concern with 30 percent of them saying that they are “not too worried” while another 20 percent stated that they are “not worried at all.”

Gallup conducted the poll in the period between April 3rd to 25th just after the collapse of two major banks – the Silicon Valley Bank (SVB) and the Silvergate Bank. Interestingly, the polling concluded just before the downfall of the First Republic Bank. However, these results were quite similar to the poll conducted during the 2008 banking crisis. In its survey, Gallup noted:

After several recent high-profile bank failures in the U.S., about half of Americans are concerned about the safety of the money they have in banks or other financial institutions. This is on par with the level of worry measured during the financial crisis in 2008 when financial institutions previously believed to be ‘too big to fail’ collapsed.

US Banking Failure Boosts Crypto Adoption

There’s no doubt in the matter that the banking crisis in the US has pushed investors toward crypto. Bitcoin and the broader cryptocurrency market gave an upward move during the collapse of the Silicon Valley Bank (SVB) as well as during the recent fall of the First Republic Bank.

It showed that investors instantly preferred crypto to put their money in as banking systems failed to deliver security to deposits. As per Morning Consult, one in five Americans i.e. 22 percent of Americans, stated that they owned at least one form of crypto in April. This is a four-percentage point increase from January 2023.

Of course, Bitcoin was the most preferred and widely held digital asset in April 2023. Around 16 percent of respondents said that they owned some of it. this is up from 13 percent a year ago. Also, 12 percent of the respondents said that they owned Ethereum by April 2023, followed by Binance Coin (BNB) and USDT, at 8 percent each.

Digital assets have traditionally been designed to work as a hedge to the traditional banking system. Since the beginning of the year, three major banks collapsed eroding over $50 billion in investors’ wealth. On the other hand,  producers, as measured by the , have gained over $41 billion in market value. While Bitcoin has been the real outperformed with 75 percent gains adding $255 billion to investors’ wealth.

Courtesy: Bloomberg

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