Coinbase stated in a report that the recent turmoil in the U.S. banking industry has strengthened the medium to long term prospects of the cryptocurrency market. David Duong, the head of institutional research at Coinbase, noted that the resilience of cryptocurrencies is due to technical factors and also because people now recognize the value of having an alternative to the traditional financial system. The Federal Reserve's policy of increasing rates has resulted in falling Treasury prices and lowered the value of banks' portfolios, leading to panic in financial markets and tumbling banking stocks.
The report suggests that the technology behind open blockchains and smart contracts contrasts with the poor risk management practices that caused the banking sector's recent turmoil. This supports the argument in favor of digital assets as a viable alternative to the existing financial system's points of failure. However, in the near term, cryptocurrency businesses may face challenges due to the loss of some fiat payment rails.