Bitcoin only solves things as long a people don't sell at the same time.
We saw what happened last year when that TerraLuna guy sold all his bitcoin reserves in an effort to raise funds to prop up his coin, and in the process tanked bitcoin from $45,000 to $16,000.
It's eerily similar to Silicon Valley Bank panic selling their medium term bonds at a loss.
All these systems are vulnerable to panic sellers.
Absolutely true but there is a big difference here and comparing the two is apples and oranges.
When people sell BTC, they're selling their money. 1 BTC = 1 BTC.
When people panic withdraw from a bank, they're straining the fractional reserve nature 1 USD does not = 1 USD when "70%" of the total asset are tied up in duration-based assets.
Posted Using LeoFinance Beta
Well let's put it this way: the purchasing power of bitcoin (in terms of food, clothes, property etc you can buy with it), is 44% of what it was before TerraLuna guy panic sold his reserves.
Purchasing power is the only true value, as sadly you can't eat bitcoin :-)
The lack of liquidity in crypto is a serious problem, as it leaves the whole eco-system vulnerable to panics.
heheh...
Bitcoin as a network continues to function just fine though. These banks, not so much. This is why self custody is so revolutionary.
Well with crypto, you could be holding on to a useless coin, with these traditional systems you'll have nothing to hold on to.