The Impacts on Bitcoin and Ethereum after BTFP (Bank Term Funding Program)

Terence C.
Coinmonks
Published in
3 min readMar 19, 2023

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The fundamentals of Bitcoin has not changed. If there is anything, it has only gotten better (Hint: STX). The fundamentals of ETH has changed quite a bit (Hint: OP), especially its transition from Proof-of-Work (POW) to Proof-of-Stake (POS). We’ll be going down a deep rabbit hole, in technical, economic and philosophical terms, if we were to delve into the details of both Bitcoin and Ethereum. The truth is, as investors, we don’t truly care about the nuances of what goes on behind the scenes as long as both product continues to rise in user adoption. When more people believe in it and when more people use it, not forgetting the fact that there is a capped supply for Bitcoin and ETH becoming deflationary, the demand would exceed the supply leading to a price increase. When it boils down to sustainable long-term adoption and user activity, not many crypto tokens out there can match BTC & ETH.

If it isn’t a matter of if, but a matter of when, why would you be afraid to hodl BTC & ETH? It makes even more sense to do so in 2023, and I’ll explain why.

The recent Bank Term Funding Program (BTFP) will lead to bank stocks severely underperforming the general market until their balance sheets are repaired. Banks would gradually lower their interest rates offered to depositors, and depositors would shift their funds elsewhere (gold or even crypto perhaps?). Every single regional bank can now assumed to be on borrowed time, at least till the BTFP program expires in March 2024. If the Fed doesn’t extend the life of the program, more banks will collapse. The Fed printed $4.189 trillion in response to COVID. Right off the bat, the Fed implicitly printed $4.4 trillion with the implementation of BTFP. During the COVID money printing episode, Bitcoin rallied from $3K to $69K. Is Bitcoin, along with the rest of the crypto sphere, positioned to rally soon?

If you had bought BTC at the start of 2023, you would have been up by over +65% right now. If you had bought the US index at the same time, you would have been up by a mere +0.5%.

Here is another interesting indicator to look at. The 10 year US Government Bonds Yield has been on an increase for more than 2 years from 3 Aug 2020 till now. It rose from 0.51% to 3.436%, and appears to be dropping recently. If it continues to fall, chances are the crypto market will react inversely. Word of caution — this isn’t investment advice. All of us are heavily influenced by what we’ve experienced firsthand, because what we’ve experienced is more persuasive than something we read about. My assumption and prediction is always incomplete, probably inaccurate, clouded with biasness and largely distorted by my own beliefs. Someone else’s experience is at best mere sketchy, but so is our own too. You, me, everyone. We are all prisoners to our past, products of our generation, and influenced by who we’ve met and what we’ve experienced, most of which has been out of our control.

We tend to cherrypick the oversimplified and self-justified arguments.

So, I’ll let facts speak for itself. We’re currently approximately 380 days away from the upcoming BTC halving in 2024.

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Terence C.
Coinmonks

There is a fine line between fishing and doing nothing. We would like to think that we’re fishing, but the truth is we don’t have the line.