Input Output (IO) CEO Charles Hoskinson said he would “rather be a crypto guy than a banker right now.”
During an appearance on Fox Business, Hoskinson shared his thoughts on the current banking crisis and its impact on the cryptocurrency world — telling host Maria Bartiromo that crypto is “holding steady and stable” despite last year’s challenges. The same cannot be said of the banking sector.
Banking crisis
After a frantic tender overseen by the Federal Deposit Insurance Corporation (FDIC,) a buyer could not be found for First Republic Bank. Its collapse ranks as the second-largest in U.S. banking history.
On May 1, in a $10.6 billion deal, JPMorgan stepped in, buying selected First Republic assets in what some call a questionable arrangement.
The Kobeissi Letter commented that rules on banking monopolies prevented JPMorgan from buying out First Republic Bank — but the FDIC still approved the deal.
In addition, JPMorgan stands to make a $2.5 billion profit from the buyout — on top of the FDIC covering First Republic’s losses and providing an additional $50 billion loan to the company.
“However, the FDIC pushed the transaction through in a matter of hours and covered $13 billion of losses.
Meanwhile, the fact that the rules were bypassed was never even discussed.”
With the demise of Signature Bank, Silicon Valley Bank, and Silvergate still fresh on the mind, the collapse of First Republic Bank has reignited fears about the sustainability of the banking model.
Nonetheless, JPMorgan CEO Jamie Dimon glossed over these concerns, saying the U.S. banking system is “extraordinarily sound,” adding that the crisis is close to concluding.
This is a view not shared with former BitMEX CEO Arthur Hayes, who posted a screenshot of the share performance of multiple regional U.S. banks, saying, “A few of these banks won’t be around next Monday” unless the Fed takes drastic action.
“It’s goblin town!
I got some puts last night. Yachtzee!”
U.S. crypto firms to focus on overseas markets
Echoing Hayes’ sentiment, Hoskinson said the banking model is fragile and “falling apart,” — making “crypto land” a nice place to be amid the chaos.
“It’s nice to be in crypto land where things are simple and pure, and you can just focus on building.”
Commenting on the tough stance from U.S. authorities, the global crypto regulatory landscape outside of America is improving, Hoskinson said.
At the same time, he criticized the inconsistent approach adopted by U.S. regulators, saying that’s just how it is here.
“We live in this bizarre Schrödinger’s cat; we are alive and dead at the same time. You’re a commodity and security at the same time. Sometimes a currency, sometimes a loyalty point.”
With that, Hoskinson accepted that U.S. crypto firms would need to focus on overseas markets from now on.
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