Those who witnessed the crisis of 2008 will definitely agree that the disaster was building up for months, and when it finally, it shook the entire global financial system. The major factions responsible for the economic crisis included the hedge funds, big finance houses, private banks, etc., who continue to get protection from the Federal Reserve till date.
Apparently, leaders of the crypto community are not happy about this and have come down lashing on the Fed for bailing out hedge funds, banks, and giant finance corporations. Anthony Pompliano, co-founder and partner at Morgan Creek Digital, tweeted on Sunday that these big finance corps have “literally unlimited” liquidity, as they can manipulate the numbers in their electronic database quite easily. He further added that it was unfortunate that the Fed wouldn’t give the same treatment to the people’s bank accounts.
Adding to Pomp’s views, Binance Chief Changpeng Zhao tweeted,
“When you don’t allow mis-managed organizations to fail (just because they are “certified”), it just kicks the can down the road for bigger problems, bigger QE, bigger robbing of normal people. At some point, the bubble will pop.”
After 12 years since the horrific crisis, the world is yet again on the verge, another severe downfall, as global financial markets have come down crashing in the last few weeks. Friday the 13th
, in particular, was devastating as Bitcoin lost more than 50% of its value before recovering a bit.Sensex at the Bombay Stock Exchange continues to fall, and as on Monday, it closed down with a whopping 7.70% in red, falling by more than 2600 points. Within a month, it has crashed from 41,000+ points to 32,700+ on March 12. Likewise, the New York Stock Exchange index had fallen to about 10,000+ on March 12, from 14,000+ on February 18. The outbreak of the deadly Coronavirus has worsened the situation, as a daily business is getting severely affected due to stricter regulations in place to prevent the spread of the pandemic.
During such times, CZ shared an “unpopular” opinion that “it’s better to let there be a constant stream of small failures in even the “established” institutions. This way, people get ‘educated’ too, albeit the hard way. We should see more frequent closure of banks, the way start-ups do”.