With interest rates plummeting below zero and the central banks printing money like crazy, it is believed bitcoin is finding new users in those looking to escape the uncertain financial system.

These new investors are apparently using BTC as a safe haven as their confidence in the traditional market wavers. With money continuing to lose its value, it makes sense, bitcoin is being looked at as a safe place to store wealth and hedge against central banks.

This week, all the major US banks also released their earnings report. The Q1 of 2020 saw heightened volatility which brought in good revenues from trading. The titans of the banking system have been overall profitable in Q1.

The earnings gave the first glimpse at the extent of the damage of the coronavirus pandemic on the banks. It also showed the prevalent theme in the sector which is stockpiling cash. Usually, banks don't set aside cash, but rather lend it out to make more money from it, but not this time. Analyst Mati Greenspan said,

“In the fractional reserve banking system, banks are required to hold a minimum amount of cash on their balance sheets. Despite the Fed removing this requirement completely last month, banks are now raising their cash buffer quite substantially.”

The earnings report of JPMorgan Chase this week revealed that its first-quarter profit plunged 69% to the lowest in over six years. The bank also set aside $8.29 billion, the biggest provision in at least a decade. Chief Executive Officer Jamie Dimon said,

“Given the likelihood of a fairly severe recession, it was necessary to build credit reserves.”

Wells Fargo’s reported the revenue of $17.7 billion while its net income dropped 89% to $653 million for the quarter. Wells Fargo’s chief executive, Charles W. Scharf said,

“The actual level of losses we incur will be driven by how long this period lasts and the level of support the government provides.”

The bank’s CFO John Shrewsberry said that the bank always sets aside more than it charges and “If things play out substantially worse, it’s certainly possible that we end up building more reserves.”

Citigroup also increased its loan reserve $4.9 billion in preparation for a US recession due to the coronavirus pandemic. The bank’s revenue jumped 12% unlike Goldman Sachs’ whose revenue was 10% lower from a year earlier while the trading division exceeded expectations.

Goldman set aside $937 million for loan losses in the first quarter, smaller in comparison to its peers.

Bank of America posted $4.8 billion in provisions and its revenue was slightly more than expected. CEO Brian Moynihan said,

“Despite increasing our loan loss reserves, we earned $4 billion this quarter, maintained a significant buffer against our most stringent capital requirement, and ended the quarter with more liquidity than when we began.”

This flight is also seen in the crypto market, with the issuance of stablecoins surpassing $8 billion. But as hedge fund king Ray Dalio emphasizes “cash is trash” and with central banks printing money relentlessly, this money parked in stablecoins is expected to finally make its way into Bitcoin.

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