The United States Treasury and top financial regulators have proposed new rules to make it easier for the Federal Reserve to designate nonbank financial institutions as systemically important, allowing for easier supervision and regulation. Nonbank financial institutions, which include venture capital firms, crypto companies, and hedge funds, currently lack supervision and are not insured by the Federal Deposit Insurance Corporation. The new guidance will replace 2019-era rules with an analysis process that determines if "material financial distress at the company or the company's activities could pose a threat to U.S. financial stability." Treasury Secretary Janet Yellen cited the recent banking crisis as a reason for greater oversight and emergency provisions to be granted to the Financial Stability Oversight Council and the Fed.

Economist Peter Schiff has cautioned that the present banking crisis is the cusp of a much worse financial crisis. “It’s going to get much much worse if you are going to try to dismiss it,” he stressed. Citing the Federal Reserve’s recession forecast, he warned: “Normally the Fed doesn’t forecast a recession. So if they can actually see this one coming, it likely means it will be massive.”

Silicon Valley Bank's (SVB) new chief risk officer (CRO), Kim Olson, is reportedly leaving the bank along with at least one other executive and the chief audit executive. Olson had only been in the role for three months before the bank was shut down by regulators. SVB did not respond to TechCrunch's request for comment on the departures. HSBC USA announced that it has hired 40 bankers from SVB to build a new offering dedicated to the innovation economy. The bank has poached veteran SVB talent, including the chief business development officer, head of Life Science and healthcare, head of tech and healthcare banking, and head of technology credit solutions. SVB was shut down by regulators in March 2023.

JPMorgan has noted that despite recent regulatory challenges, the cryptocurrency market has rallied strongly over the last month, with bitcoin outperforming. The bank says that bitcoin and gold gained at the same time as both are viewed as hedges to a “catastrophic scenario.” Recent problems in the banking sector have also “exposed the weaknesses of the traditional financial system given bank’s maturity mismatch is susceptible to bank runs,” which crypto supporters view as a vindication of the crypto ecosystem. The most important support for bitcoin has come from rising investor focus about next year’s halving event, scheduled for April 2024, when mining rewards are cut in half.

The latest banking crisis could lead to “the first-ever extended duration bull market” for Bitcoin (BTC), according to Swan Bitcoin CEO Cory Klippsten.

Insiders of defunct Signature Bank reportedly sold over $100 million of shares in the years after the bank shifted its focus to attract cryptocurrency companies. The bank's deposits surged by 68% in 2021, and the launch of the bank's shares recorded a 140% gain in the same year. A major chunk of shares was sold by the executives in the spring of 2021 at nearly $220. Bank disclosures show that the chairman sold $5.4 million of stock in 2021, and the chief executive and chief operating officer sold $13.9 million and $14.9 million of shares, respectively, in 2021. Signature Bank was reportedly being investigated by two US government authorities prior to its fall, with the Justice Department investigating whether the company took necessary measures to identify potential money laundering by its clients, and the SEC also looking into the bank's dealings. Signature was placed in receivership by the Federal Deposit Insurance Corporation (FDIC), with the agency now intending to market a $60-billion loan portfolio in the coming months.

According to a research report by Coinbase, cryptocurrency markets, particularly Bitcoin (BTC), have displayed resilience in the face of recent upheaval in the U.S. banking system. Bitcoin has outperformed other digital assets since mid-February, with its dominance as a percentage of total crypto market cap increasing to 47.7% from 43.9% in March. The stress in the banking system has reinforced Bitcoin's store-of-value properties, and BTC mainly exists outside of the traditional financial system, offering a hedge against current conditions. Bitcoin has also benefited from investor concerns about the regulatory status of other cryptocurrencies, and its correlation to the S&P 500 stock index has dropped to 25% at the end of March from a peak of 70% in May last year. The relative outperformance of Bitcoin also reflects investor concerns about the regulatory status of other digital assets and thinner liquidity specific to some BTC versus stablecoin trading pairs.

Renowned economist Nouriel Roubini, also known as "Dr. Doom," wrote an opinion editorial for MarketWatch in which he asserts that most US banks are technically near insolvency, and hundreds are already fully insolvent. Roubini highlighted how banks in America carry unrealized losses on securities amounting to $620 billion and said, "the 'unrealized' nature of these losses is merely an artifact of the current regulatory regime, which allows banks to value securities and loans at their face value rather than their true market value." He believes that the US economy may face a harder landing due to the credit crunch caused by banking stress and referred to it as a "house of cards." Roubini concludes that everyone should be preparing for the coming stagflationary debt crisis. (Bitcoin.com)

The recent banking failures in the US, including Silicon Valley Bank, Signature Bank, and Silvergate Bank, have led to a political blame game between President Biden and former President Trump, with each accusing the other's policies for the banking crisis. However, some analysts believe the issue lies within the banking system's management and the lack of expertise of banking operators resulting from years of low-interest rates. Andre Esteves, CEO and founder of BTG Pactual, believes this lack of expertise caused the debacle at Silicon Valley Bank, as the current generation of operators only knows inflation and hawkish policies by book or in theory, but not in practice.

The US Federal Deposit Insurance Corporation (FDIC) has ordered Signature Bank's remaining crypto clients to close all of their accounts at the bank by April 5. This comes after the FDIC took over Signature Bank, which had a negative balance at the Fed and was unable to provide accurate data regarding the amount of deficit incurred after Silicon Valley Bank went bankrupt. The FDIC's notice pertains to the $4bn in deposits from crypto customers that were excluded from New York Community Bancorp's takeover of most of Signature's deposits and loans. The fate of Signet, the bank's payment network developed for cryptocurrency payments, remains unclear.