Given the U.S. Federal Reserve’s (FED) actions on interest rates and inflation, experts in the cryptocurrency community have recently been debating the possibility of a financial crisis and bank failures, mostly in the United States.
Jeffrey Snider, the Chief Strategist at Atlas Financial, said a big chance of a banking crisis is likely, given that the futures market for the Secured Overnight Financing Rate (SOFR) contract expiring in June 2023 is being heavily bought after hours.
Snider claims that there is an excellent chance that the financial situation could worsen to the point where the FED will have to lower interest rates at its next meeting in June 2023 as a result of the massive after-hours buying of these contracts.
The recent bank collapses, on the other hand, may merely be the “appetizer” of a far bigger crisis that is still to come, according to Balaji Srinivasan, the former CTO of the Coinbase cryptocurrency exchange.
According to Srinivasan, the current situation may resemble the financial crisis of 2008, in which the fall of Washington Mutual (WaMu) ten days after the failure of Lehman Brothers on September 15 caused a domino effect.