Hello friends! Today we will delight you with an unusual theory. A number of respected people, including a congressman and top bank executives, have stated that the recent collapse of American banks was not an accident, and not at all what the masses took it for. In fact, it was a planned attempt to attack the crypto industry, which unexpectedly failed.

A Banking Panic or a Planned Crypto Attack?

What do the 3 collapsed banks have in common?

• Silvergate provided conversion between U.S. dollars and cryptocurrencies for more than a dozen major U.S. crypto exchanges and companies. For example, it worked with FTX and Coinbase.

• Silicon Valley Bank (SVB) is a rather large bank that works mostly with fintech startups, including cryptocurrency ones. In particular, it held some of the collateral for the leading stablecoin, USDC.

• Signature Bank is one of the more friendly crypto banks that has serviced withdrawals and conversions from exchanges like Kraken. The case of Signature is different from the previous two banks — it was shut down forcibly by the authorities, not on its own initiative.

Was the almost simultaneous collapse of these three systemically important banks for the crypto industry an accident?

Conspiracy Theory Against Crypto

Former congressman and Signature Bank board member Barney Frank unexpectedly directly accused U.S. regulators of a planned attack on the bank as well as deliberate actions aimed at discrediting the crypto industry.

User @nic__carter comments on these accusations as follows:

“Dear God. Barney Frank openly admits that Signature was arbitrarily shuttered despite no insolvency because regulators wanted to kill off the last major pro-crypto bank. Colossal scandal”

User @ByzGeneral commented on this failed attack attempt:

“Well, if they actually purposely killed Signature bank to send an anti crypto message then they did a horrible job. The entire banking sector died today and crypto is flying. A really powerful narrative is brewing.”

On the same day, Jason Lowery, who has connections in the U.S. president's administration, tweeted about the insider information he had learned:

"Soon, powerful people within the US government will try to assert that supporting Bitcoin is a threat to US National Security. "

But that's not all. Minnesota Congressman Tom Emmer went straight to the FDIC because he became aware of a planned attack on crypto under the umbrella of a banking panic:

“Today, I sent a letter to FDIC Chairman Gruenberg regarding reports that the FDIC is weaponizing recent instability in the banking sector to purge legal crypto activity from the U.S.”

The logic of the attack

If what these respected people say is true, why did the authorities want to attack crypto banks? What was their intention?

We find the answer in Morgan Stanley's latest report, where the bank's analysts parse the nature of Bitcoin. They noted that the first cryptocurrency, despite all the claims of decentralization, is not isolated from the traditional financial system, as its price is determined by bank liquidity in U.S. dollars.

Although the Bitcoin network can technically operate without banks, financially it needs traditional banks to bring liquidity to the cryptocurrency market, Morgan Stanley said.

Based on this logic, if the crypto sector is abruptly cut off from bank (fiat) liquidity, it could cause the collapse of the price of Bitcoin and all other cryptocurrencies, according to analysts.

What can we say to this investment bank in response to such a statement? Morgan Stanley's shares have fallen 20% in the last 30 days, while Bitcoin has also risen 16% in the same 30 days. These numbers are exactly what make the difference between theory and actual practice.

What conclusion can we draw?

At least now we can understand the logic of the government agencies behind the attack if we consider the statements of these banking experts. Then all these accidents become consistent, and everything that happened is seen quite differently.

The most important conclusion is that the experiment in the wild showed that Bitcoin is not built the way the architects of this attack thought it would be. The attackers literally shot themselves in the foot, causing a wave of panic in the banking sector, and this against the backdrop of a sharp rise in Bitcoin. In other words, the effect of the attack was just the opposite of what was intended.

In addition, what happened most likely broke the long-term plan of raising rates and strengthening the dollar in 2023, which the Fed system was aimed at. U.S. banks borrowed $303 billion from the Federal Reserve in the last week, a new historical record. Instead of tightening financial policy, we suddenly got a new "money printing."

In other words, Bitcoin won not only tactically but strategically — such a huge inflow of new liquidity is very profitable for the first cryptocurrency. Perhaps what happened showed not only the unexpected fragility of the banking system but also, unintentionally, be the trigger of a new future bull run for the entire cryptocurrency market.

If you find it hard to absorb many letters at once, as an alternative, all of this is packed into this beautiful music video about recent events:

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