Welcome to ‘Hyperbitcoinization’: The Future of Banking Without Banks

According to Bernstein analysts, the recent banking crisis has shown how bank runs can be created, and any further collapse could be critical for Bitcoin.

“Welcome to the new world of hyperinformation and hyperbanking,” said Bernstein analysts led by Gautam Chhugani, referring to the frenzy on social media that fueled tensions around the collapse of the Silicon Valley bank.

Nearly $120 billion in deposits flowed out of regional banks in the week ended March 15, with more than half going to the big banks. The crisis eventually spread to Europe, eventually leading UBS to buy rival Credit Suisse on March 19.

Chhugani said banks are facing new risks that they “didn’t anticipate” before.


Ultra-fast money outflows are not yet available, but will soon be possible through instant payment systems, such as the FedNow platform launched by the Federal Reserve later this year. The platform will provide financial institutions of all sizes with 24/7 real-time payment access.

The new era of top-up deposits presents customers with unknown counterparty risk, and cryptocurrencies can actually help mitigate some of that risk, Bernstein said.

“The simplicity of cryptocurrencies as digital earning assets resolves the direct counterparty risk faced by bank clients, but clients also demand price stability. Treating”.

Bitcoin may not be attractive to customers who currently view the U.S. dollar as stable, but that could change.

“As we head towards another pivotal moment in monetary history, savers will be on the lookout not only for the stability of nominal values, but also for any surprises that force the Fed to break through again on the ‘real value’ of government coins.

This would be the “ultimate path to hyperbitcoinization” scenario that some staunch bitcoiners have suggested.

old meets new

The investment bank believes that the benefits of a decentralized financial system based on smart contracts will suddenly emerge in a form that is “built for this world.”

In Bernstein’s view, DeFi could facilitate a new kind of self-service banking system.

“Instant liquidation of positions without any delays, do-it-yourself risk insurance on the blockchain, depositing stablecoins for income-based returns on financial protocols” is what the analyst said. Analytics for Visual Banking.

They say the bank will be more personal, smarter and real-time – leading to more financial independence for users in the future.

“The future of banking is without banks, and we can make that our meme!” wrote Chhugani and his colleagues.

board take

According to the block

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