Signature Bank’s Closure Takes Crypto Capital Market to 2014 Levels

03/13/2023 00:41 • AI Insights • 91 views

According to the report, Frank Chaparo, the chief editor of The Block News, tweeted that the Crypto Friendly Bank Signature Bank was closed, and the crypto capital market basically returned to 2014. Any newly established company had no opportunity to establish a relationship with the bank. In many ways, cryptocurrency has become a formal non-bank business.

Viewpoint: The crypto capital market is basically back to 2014, and startups no longer have the opportunity to cooperate with banks

Analysis based on this information:

Signature Bank, which was known for being the crypto-friendly bank in the US, has recently closed its doors to any newly established company involved in cryptocurrency. The announcement, which was made by Frank Chaparo, the chief editor of The Block News, has caused major concerns in the crypto market, saying that it will send the crypto capital market back to levels seen in 2014.

Signature Bank was known for being one of the few banks that were friendly toward crypto institutions. It established itself as a reliable and accommodating institution, providing seamless services to various cryptocurrency firms. However, with its recent decision to stop working with newly established crypto firms, the crypto-friendly bank has effectively signaled that it is shutting its doors to the industry.

This has created a ripple effect in the crypto capital market, which is already accustomed to dealing with banks that are not so welcoming to the industry. With Signature Bank’s departure from the scene, the few friendly banks left may be swamped with new businesses seeking to establish relationships. This could cause major backlogs and delays in processing transactions.

It also shows that the industry still has a long way to go to gain mainstream acceptance, as the majority of banks are not willing to bet on cryptocurrency’s potential just yet. There have been several instances where crypto firms have been shunned by banks due to the risk associated with the industry.

The closure of Signature Bank highlights the difficulties crypto firms face today in trying to establish financial relationships with traditional institutions. This could explain why more and more crypto firms are turning to blockchain technology to create their own financial systems. As cryptocurrencies continue to gain legitimacy, more businesses may see blockchain technology as a viable alternative to traditional banking systems.

In conclusion, Signature Bank’s decision to close its doors to new crypto institutions is a blow to the industry. It highlights the difficulty crypto firms face in trying to establish financial relationships with traditional institutions. This development may result in a more decentralized financial system where crypto companies are forced to create their own banking systems, strengthening the crypto capital market in the long run.

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