63 banks considered to be of serious concern or unviable – Bitcoin anyone?

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As a crypto investor with experience in the financial industry, I find the FDIC’s Quarterly Banking Profile for Q1 2024 deeply concerning. The fact that 63 banks were rated as “poor performance that is of serious supervisory concern” or “unsatisfactory performance that is critically deficient and in need of immediate remedial attention,” is a clear indication that the banking industry is not as resilient as the FDIC would have us believe.

The FDIC unveiled its Quarterly Banking Profile for the initial quarter of 2024, revealing startling data concerning the quantity of financially distressed banks in existence. Amid such instability, Bitcoin emerges as a compelling safeguard against a possible banking crisis.

FDIC’s problem bank list

The Federal Deposit Insurance Corporation (FDIC), a US government entity, is responsible for safeguarding bank deposits and overseeing banking institutions. In its latest Quarterly Banking Profile for 2024, the FDIC announced that 63 banks received a CAMEL composite rating of 4 or 5. This finding, although presented in an optimistic report, raises significant alarm.

The CAMEL assessment methodology evaluates a financial institution’s health using the indicators of Capital Adequacy, Asset Quality, Management, Earnings, and Asset-Liability Management. Ratings range from 1 to 5: a “4” signifies below average performance that warrants heightened supervisory attention, while a “5” denotes very poor performance in need of urgent corrective measures.

In the initial quarter of 2024, the FDIC reported a increase from 52 to 63 banks on its “troubled institutions list.” This figure falls within the anticipated expansion during a regular economic climate.

The current unfilled loss total for the US banking sector stands at a staggering $517 billion, marking a $39 billion rise during the first quarter of the year.

A resilient banking industry?

In a optimistic and upbeat manner, the FDIC report highlighted that the banking sector displayed robustness during the initial quarter, even amidst notable challenges.

As a crypto investor, I understand that it’s not uncommon for regulatory bodies like the FDIC to downplay the severity of banking crises. However, with 63 banks under consideration as being of serious concern or unsustainable, it’s natural for me to question the stability of the traditional banking system and seek alternative investment opportunities.

It’s natural to ponder whether these banks truly provide any benefits, in terms of services and cost effectiveness, that set them apart for their customers, particularly given that 63 banks face potential risks and even larger institutions seem to be falling short in this aspect.

Among the largest US banks, the top savings rates range between approximately 4% and 5.15%. However, when factoring in debasement and inflation, the average individual may be losing around 12-14% of their purchasing power annually. Consequently, saving money in a 4-5% interest account with banks might leave them swimming against the current instead of keeping their heads above water.

Value offered by banks compared with that provided by Bitcoin

Due to the significant influence the banking industry wields over the US political landscape and the media, it will be a formidable challenge to dislodge their power.

People are becoming increasingly aware of the meager benefits they receive from their traditional banks. At the same time, they may be observing the advantages that Bitcoin holders enjoy. One system imposes control and manipulation, while the other offers unrestricted transaction capabilities and a reliable store of value. Which one would you prefer?

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2024-06-04 16:08