The US banking sector is experiencing significant financial strain, with unrealized losses on investment securities reaching $512.9 billion in Q2 2024, seven times higher than during the 2008 Financial Crisis. This marks the 11th consecutive quarter of unrealized losses, as rising interest rates continue to pressure the economy.
BREAKING: Unrealized losses on investment securities for US banks reached $512.9 billion in Q2 2024.This is 7 TIMES higher than at the peak of the 2008 Financial Crisis.Q2 2024 also marked the 11th consecutive quarter of unrealized losses as interest rates continued to… pic.twitter.com/S7WZP6eOWV
— The Kobeissi Letter (@KobeissiLetter) September 21, 2024
Bank of America, the second-largest lender in the US, holds $110.8 billion in held-to-maturity securities with unrealized losses, accounting for 20% of the total losses across US banks.
Meanwhile, small banks hold 70% of outstanding commercial real estate debt.Many of these loans are on the brink of default.Just because rate cuts started, it doesn’t mean we are smooth sailing into 2025.Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) September 21, 2024
The number of banks on the FDIC Problem Bank List increased to 66 in Q1 2024, representing 1.5% of the industry.
Bitcoin Adoption & Bitcoin Price
In response to the 2008 financial crisis, Bitcoin was created as a decentralized alternative to traditional financial systems by anonymous actor Satoshi Nakamoto. Now, as US banks face major losses, many are turning to Bitcoin as a haven. Bitcoin is viewed as a hedge against inflation, banking failures, and economic uncertainty.
As banks report significant losses, Bitcoin is experiencing a surge in adoption and price. Investors are increasingly turning to Bitcoin as protection against the risks posed by traditional banking. The current banking instability is driving renewed interest in decentralized assets like Bitcoin.
With the US banking sector under pressure, Bitcoin’s role as a decentralized asset is more relevant than ever. As more people turn to Bitcoin to protect their wealth, its value is expected to continue rising, potentially accelerating adoption amid ongoing banking challenges.
The current trade price of Bitcoin is $62,656 and is 135% higher over the last 12-month period.
Read also: Ripple CTO Speaks Out Against Accusations of $XRP Price Manipulation
