Latest / Simply Bitcoin / Did The FED Just Try to Hide a Banking Crisis?! (Bitcoin Knows) | Beyond Bitcoin

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Did The FED Just Try to Hide a Banking Crisis?! (Bitcoin Knows) | Beyond Bitcoin · Simply Bitcoin

0:00
Bitcoin is up 6% this week on the back of a military strike.
0:04
A bank in Chicago quietly failed last month. the Fed is frozen,
0:08
can't cut, can't hike, just sitting.
0:10
Three things just happened and you probably only heard about
0:13
one of them, and it might not be the one that you think.
0:16
Today I want to show you why the silence around the 1st 2 is the
0:18
whole story. Emotions.
0:20
This is beyond Bitcoin. Let's dive in.
0:28
We are living in the age of noise.
0:30
The financial system can be failing on three fronts
0:33
simultaneously, and if there's a loud enough distraction running
0:35
in parallel, none of it makes it past your cat videos.
0:39
And right now, the distraction machine is going full speed.
0:43
At the time of this recording, Bitcoin is trading around
0:45
$67,000, which given what we're about to walk through, seems
0:49
like it should be getting a little bit more attention than
0:51
the tariff of the week or the war of the month.
0:54
Today. Three things.
0:56
And these aren't three separate stories.
0:58
They are three pieces of the same argument.
1:00
Three ways the system is losing the plot while everyone is
1:04
picking their nose. First, a bank in Chicago called
1:07
the Metropolitan Capital Bank failed last month, January 31st.
1:11
In 2026, First Bank failure of the year, 82% of its assets were
1:15
locked up in commercial real estate.
1:18
Regulators shut it down on Friday, but Monday morning it
1:21
wasn't a lead story anywhere. Second, the Federal Reserve is
1:25
frozen. Powell can't cut without making
1:27
inflation worse, and he can't hike without making the debt
1:30
worse. His term ends in May, and
1:32
there's political pressure on who replaces him.
1:34
Meanwhile, $10 trillion of U.S. debt needs to be rolled over
1:37
this year at current interest rates, not the rates of 2020.
1:41
Current rates? What are those rates at again?
1:44
3.75? What were they in 2020, .25 and
1:48
third, While all of that was happening, Bitcoin didn't wait
1:51
for anyone to notice. Strategy made its 101st
1:54
consecutive weekly purchase, ETF inflows hit a 458 million.
1:59
And when Israel and the US struck military targets in Iran
2:02
on Saturday morning, Bitcoin moved up, not down, up.
2:06
It's going up forever, Laura. The thesis here is simple.
2:09
The system is sinking like the Titanic while the band softly
2:12
plays the tariff Sonata. And we've been watching it long
2:15
enough that it's about as old as rose.
2:18
A bank fails, fine. the Fed freezes, fine, $10 trillion
2:23
rolls over at 4%, fine. Bitcoin doesn't care whether
2:27
we're paying attention. It just keeps going.
2:29
Never let go, Jack, Never let go.
2:32
Let's start with the Metropolitan Capital Bank,
2:34
January 31st, 2026, Friday afternoon FDIC steps in, cites
2:40
unsafe and unsound conditions, says the bank had an impaired
2:43
capital position. Deposits go to a bridge
2:46
institution. Branch doors close.
2:48
You probably didn't hear about this.
2:50
I want you to sit with that for a second, because I think the
2:52
silence is more telling than the failure itself.
2:55
In case you missed it, Chicago's Metropolitan Capital Bank and
2:59
Trust was shut down this weekend, regulators stepping in
3:03
to pull the plug, citing unsafe and unsound conditions with an
3:07
impaired capital position. AKA they were broke.
3:12
Now the FDIC, the Federal Deposit Insurance Corporation,
3:16
stepped in to oversee the failure, honoring deposits up to
3:19
$250,000. But next time, depositors might
3:23
not be lucky, because the story doesn't end there.
3:27
There's an old saying that if you see one cockroach, it's
3:30
never just one, meaning that while this might be a small bank
3:34
failure, this could be the signal that many more are
3:37
coming. First Bank failure of 2026.
3:39
Now here's what's actually in their portfolio.
3:41
The Metropolitan Capital Bank had $261 million worth of assets
3:47
and $212 million worth of deposits, which sounds pretty
3:51
great, but let's pause for a second.
3:53
Because most people when they hear the word asset, they
3:56
picture something with value, something positive like real
3:59
estate, cash, gold, silver. But for banks, assets are very
4:04
different. Typically, assets are someone
4:07
else's liability. This is a very important
4:10
distinction. And loans are the biggest piece
4:13
of these assets. So let's say you take out a
4:16
mortgage from a bank. Well, that's an asset for the
4:18
bank, but a liability for you. The same goes for commercial
4:22
real estate loans, business loans, treasury bonds are often
4:26
also considered part of their assets, which all is great on
4:30
paper, but not always in practice.
4:32
The problem is, is that right now in the US banking system,
4:36
all of these so-called assets are really massive unrealized
4:40
losses, meaning banks can't sell them for what they bought them
4:44
for or what they are worth on paper, making their assets
4:48
completely illiquid. In this particular case, it's
4:52
come out that 82% of metropolitan Capital Banks
4:55
portfolio was in commercial real estate and private equity
4:59
funding commercial real estate which used to be seen as one of
5:03
the safest places to invest. There will always be demand for
5:07
commercial real estate, which we'll get to in a second.
5:10
And while I'd like to tell you that this is an anomaly, the
5:13
truth is that over 2/3 the majority of total commercial
5:18
real estate loans in the United States are held by regional
5:22
banks, meaning the exposure and the risk that this bank just
5:26
went through is happening all over the country. 82% in
5:30
commercial real estate and private equity 82 Commercial
5:34
real estate truly one of the most pristine of failing asset
5:37
classes. Empty office towers, retail
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space nobody needs, strip malls worth half of what they were
5:42
financed at, filled with Pilates studios and nail salons.
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Well, one small bank in Chicago just confirmed what everyone's
5:49
been ignoring. Now. 261 million is not SVBSVB
5:53
was at 209 billion. This is a rounding error by
5:56
comparison. But the reason small failures
5:59
matter is the same reason the cockroach metaphor exists.
6:02
You never see just one. Here's what got me about this
6:05
story. It wasn't the bank itself.
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It was the crickets after. No CNBC talking heads, no
6:10
breaking news scroll, no Economist panel.
6:14
You had to specifically search for it to find it.
6:17
Well, well, I didn't. My AI agent did, but I digress.
6:21
And FDIC insured American bank deposits branches.
6:26
The whole thing shut down on a Friday, and the news algorithm
6:31
had already moved on before the weekend was over.
6:33
The normalization is the story. We've seen so many crisis
6:37
signals over the past five years that we've stopped flinching,
6:41
and that's not healthy. That's the most dangerous state
6:43
you can be in when warnings stop feeling like warnings.
6:47
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7:12
simply Topic 2, the Fed Richard Claridia was the Fed vice chair
7:17
under Powell. He's not a Bitcoin person.
7:19
He's a former central banker giving a measured assessment on
7:23
the Bloomberg podcast. Keep that in mind.
7:25
And what he said was remarkably honest.
7:28
Take a look. Stephanie Kelt There's a theory
7:30
which is very much against people like you on what modern
7:34
monetary theory should look like.
7:36
And part of that theory is the intrusion of politics in the
7:40
monetary economics. Right now we're doing almost
7:44
Voracion tariff law, McKinley tariff law, certainly from a
7:48
19th century. Can the political system be
7:51
patient enough to get declared as medium term success?
7:57
Well, I'm not sure and in particular gets it another
7:59
fundamental idea in economics which is the idea of time
8:02
consistency that eventually people figure out that your
8:05
promise now may not be delivered in the in the future.
8:09
And so that's why in particular, if the 20% tariffs that we're
8:12
hearing about are really the beginning of a negotiation, that
8:16
also adds an additional layer of uncertainty on top of just
8:19
knowing what the tariff number is, is now.
8:21
You know, TomTom, we saw when I was at the Fed in 2019 that in
8:27
fact just the uncertainty about the trade policy itself was a
8:31
damper to the economy. And that's a very tangible
8:34
factor, fact of life in macro. And I think we're seeing an
8:37
elevated version of it now, intrusion of politics into
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monetary economics. That's a former Fed vice chair
8:44
saying the tariff policy is historically unprecedented and
8:48
it's compromising the central bank's ability to function.
8:51
On a Bloomberg podcast, he's saying this.
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Here's the trap the Powell is in.
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Inflation is still running hot around 3% PCE.
8:58
That's well above their target of 2%, I believe.
9:02
So cutting rates looks like throwing gas on the fire.
9:05
But the economy is slowing, growth forecasts are coming
9:08
down, companies are pulling back on investment because nobody
9:11
knows what the tariff environment looks like for the
9:13
next quarter. If that continues, the Fed needs
9:16
to cut to stimulate. So if you can't cut and you
9:19
can't hike, you have to hold and wait.
9:21
Powell said it himself at the January 28th FOMC press
9:25
conference. We don't, we don't take things
9:26
off the table, but it isn't anybody's base case right now,
9:29
anybody's base case that the next move will be rate hike.
9:33
But, you know, ultimately we'll do, we'll do what we think is
9:37
the right thing, but that's, that's not where people's
9:39
expectations are right now. Victoria, hi, Victoria Aguida
9:47
with Politico. I wanted to ask, you've talked
9:50
in the past about concerns about the US fiscal trajectory and
9:53
we've seen in the Japanese bond market a lot of turmoil recently
9:57
in part due to concerns over their their fiscal and and long
9:59
term economic outlook. So.
10:01
Do you? Worry that the US could at some
10:03
point find itself in a similar situation to Japan, whether for
10:07
fiscal or demographic reasons. You know, over time you've seen
10:10
that US rates have remained pretty and they haven't moved a
10:14
lot really for a while, but they haven't moved a lot because of
10:18
what's been happening in Japan. So it's more of an overtime
10:23
thing. The US federal budget deficit
10:25
is, you know, uncontroversially on an unsustainable path.
10:29
The level of debt is not unsustainable.
10:31
It's very much sustainable. But the path is unsustainable
10:35
and the sooner we work on it, the better.
10:36
The debt is not unsustainable, but the path is, Powell says,
10:40
not anybody's base case right now that the next move will be a
10:44
rate hike. That's Powell speak for.
10:46
We're not doing anything anytime soon.
10:48
We're watching the data and hoping the tariff situation will
10:51
resolve itself in the background.
10:53
Now, here's why that's a real problem rather than just a
10:56
boring C-SPAN clip. the United States government has roughly
10:59
$34 trillion in total national debt.
11:02
But again, it's sustainable debt, so it's OK, $10 trillion
11:06
of that needs to be refinanced or rolled over this year.
11:10
New bonds, new rates. Those new rates run around 4.1
11:14
to 4.2% on the 10 year. And if I understood what I was
11:19
talking about, man, I'd be rich. But most of this debt was
11:22
originally issued when rates were near 0, and in some cases
11:26
literally 0. Here's James Lavish who actually
11:28
runs the math on this, in real time, I should add.
11:32
Take a look. Now you've got $10 trillion of
11:34
debt that's got to be turned over annually, plus you're
11:37
adding one to $2 trillion of that every single year, probably
11:40
more. And you now you need more buyers
11:45
of treasuries. Where are they going to come
11:47
from? Where are they going to come
11:49
from? Well, now you've got this.
11:51
Whole this whole. Fight in Congress about, you
11:56
know, the basically the stable coin legislation that they're
12:02
trying to make it. They're trying to to create a
12:07
situation where you have stable coins that are, that are, you
12:12
know, pegged to the US dollar clearly issued through banks.
12:17
And the banks are the ones who are going to be buying these
12:20
these treasuries because they're they're using them for stable
12:24
coins. $10 trillion of debt that's got to be turned over
12:27
annually plus you're adding one or two trillion of that every
12:30
single year probably more at 4% on 10 trillion that's $400
12:34
billion a year just in interest rates on the rollover more than
12:39
the entire defense budget. And the reason this connects to
12:42
Bitcoin, the reason I'm not just doing a macro podcast, is that
12:46
there's only one real lever left, one way out of the debt
12:50
spiral of this magnitude at these interest rates.
12:54
Can you guess what it is? Print, baby.
12:56
Yes, that's right, print. Inflate the debt away, let the
13:00
dollar buy less so the nominal number becomes more manageable.
13:04
The oldest trick in the monetary playbook works great for
13:06
government and goes perfect on toast.
13:08
The downside is it doesn't work for anyone holding dollars.
13:12
And there's this. Powell's term ends in May.
13:14
There's already public speculation about his
13:16
replacement, whether Trump wants someone to be more cooperative.
13:20
A cooperative fed, by the way, means a Fed that prints when
13:24
he's asked. So that's where we are.
13:26
Let's talk about the good news. I want to give a shout out to
13:28
the Bitcoin Way. If you've been sitting here for
13:30
the last few minutes thinking I should probably take my Bitcoin
13:33
off in exchange, yes you should. And the Bitcoin Way is the team
13:37
to walk you through that. Book a free 30 minute
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consultation. No pitch, no pressure, just a
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custody, step by The good news?
14:05
Bitcoin was just doing Bitcoin things.
14:07
Strategy made its 101st consecutive weekly purchase
14:10
every single week for almost 2 years.
14:13
They have bought Bitcoin. Not We plan to buy Bitcoin
14:17
regardless of price, regardless of what the next news cycle says
14:20
or serving you up 101 weeks in that time, a tariff war, a
14:24
banking failure, a Fed that won't move, and one actual
14:28
military war. Strategy bought Bitcoin through
14:31
all of that. Dude is committed.
14:34
Here's Sailor on CNBCA few weeks ago.
14:36
Take a look. I expect we'll be buying Bitcoin
14:38
every quarter forever. Just so we all understand, what
14:44
is the price at which this story gets much more complicated for
14:49
you and therefore the rest of the Bitcoin community?
14:51
I think there's a a sense that given how large a player you
14:55
are, if if the price of Bitcoin were to fall to a place and and
14:59
and continue to stay there for 2 1/2 years from now and and you
15:03
were forced into a selling position that that unto itself
15:07
could create a cascading problem.
15:10
Andrew, if if Bitcoin falls 90% for the next 4 years, we'll
15:13
refinance the debt. 90% bitcoins never dropped that far, right?
15:19
His answer was essentially there isn't a price that will stop
15:22
buying. You can think that's reckless,
15:24
you could think Sailor is overextended, but what you
15:27
cannot say is that he's unclear about his conviction.
15:30
Bitcoin ETF saw 458 million in inflows the week leading into
15:35
this episode. Institutional money, pension,
15:38
adjacent money, and illicit activity money all flowing in
15:42
while the tariff story create your attention.
15:45
And then Saturday morning happened.
15:47
Israel and the United States struck military targets in Iran,
15:50
which from a market's perspective, is the exact worst
15:53
time for something geopolitical to happen.
15:55
Stocks are closed, bonds are closed.
15:57
The only thing that trades on Saturday morning is crypto.
16:01
Historically, when fear spikes on a weekend, Bitcoin goes down.
16:05
Since it's a highly liquid asset, it's the only thing you
16:08
can sell when markets are closed, so people sell it.
16:11
Here's CNBC from the days after. Even after US and Israel's
16:15
attack on Iran over the weekend, by noon Eastern, Bitcoin crossed
16:19
A70K threshold and was trading at $73,317.00.
16:24
Crypto markets largely recovered after a plunge in the immediate
16:27
aftermath of the attack Saturday morning.
16:29
Prices jumped on Tuesday and are heading even higher Wednesday
16:32
morning. Now.
16:33
For the week, Bitcoin was up more than 6%, ETH by about 3
16:37
1/2% and Solana by more than 2%, all out performing broader
16:41
market. Bitcoin crossed $73,000 for the
16:44
first time in about a month, up 6% for the week on the back of a
16:48
military strike. Here's what a representative of
16:50
Pentera Capital on Bloomberg said about it.
16:53
Take a look. And people are starting to
16:55
realize that actually Bitcoin and other digital assets have
16:57
always been a safe haven asset and have always been a, you
17:01
know, a borderless like sovereign less asset.
17:04
And so when the geopolitical conflict, nothing in blockchain
17:07
really gets impacted. And that's why we're seeing
17:09
investors come back to this story and realize that there's
17:11
an interesting entry point. So what does the move in Bitcoin
17:15
and other altcoins say about the current risk appetite right now?
17:19
Because on the one hand, we've seen a lot of broad risk off
17:22
moves in the market like software stocks falling in
17:25
yesterday's drawdown. But that runs counter to the
17:28
moves that we're seeing in the crypto market right now,
17:30
specifically Bitcoin, which would typically suggest a risk
17:33
on sentiment. I think it it really depends on,
17:37
you know, the the context of the that the assets are found in,
17:40
right. I think Bitcoin and other
17:42
digital assets just been so oversold over the last few
17:45
months. If we go back to just even
17:46
February, we saw one of the largest sell offs in a very
17:50
sharp move after after Kevin Walsh was nominated to the next
17:53
fair chair, you know, we saw in very large liquidations of on
17:57
chain assets by what people call OG Bitcoin whales or OG Ethereum
18:02
whales. And so there's just a lot, a lot
18:04
of selling that has already happened for the digital asset
18:07
space that really we didn't see in other asset classes.
18:09
Other asset classes have been doing great for the last few
18:12
months. People are starting to realize
18:14
that Bitcoin has always been a safe haven asset.
18:16
Yeah, they're starting to, but OK, better late than never.
18:19
The 24/7 global monetary asset absorbed a Saturday morning's
18:24
worth of geopolitical fear and came out 6% higher for the week,
18:28
while the Bank of Chicago was cleaned out, while the Fed was
18:31
holding, while $10 trillion of debt was rolling over at 4%.
18:36
Bitcoin didn't need the new cycle to be favorable.
18:39
It didn't need Powell's permission.
18:41
It didn't even need the Fed meeting.
18:43
It just kept crushing it real quick one, before I sign off, I
18:46
want to talk about Club Orange, formerly known as the Orange
18:48
Pill app. It's the premier phone app for
18:50
connecting with Bitcoiners like yourself.
18:52
I've been connecting with a lot of you folks on there and
18:54
honestly, it's been awesome. If you want to be around people
18:56
who think through all of this, the bank stuff, the Fed freeze,
19:00
the Bitcoin safe haven thesis, that conversation is happening
19:02
on cluborange.org every single day.
19:05
And if you want to reach out to me directly, you can go.
19:07
I'm there at Oceans OSHINSI read every message and I respond
19:12
accordingly. So here's what I want you to
19:13
take away from today. Metropolitan Bank, January 31st,
19:17
First Bank failure of 2026. Goodbye.
19:19
Federal Reserve frozen $10 trillion rolling over at 4%
19:23
Stagflation building political pressure on independence so long
19:27
Iran strikes. Bitcoin goes to 73,000 dollars,
19:31
101st strategy purchase. Bitcoin also mostly gone after
19:35
sailor buying it. Three things that barely
19:38
registered because your algo just loves to show you exactly
19:42
how you can reduce your back pain easy, just buy Bitcoin.
19:45
I think we've built a very dangerous tolerance for bad
19:47
signals. The warning lights are on.
19:49
They've been there for a while and we've just adjusted to them
19:52
being on. We've decided that it's just
19:55
what the dashboard looks like now.
19:56
But the warnings are still warnings, and the debt is still
19:58
debt. And even if it's sustainable
20:01
debt, the Fed trap is still the trap.
20:04
Bitcoin is the only system I know that doesn't have a snooze
20:06
button. It doesn't care about the noise.
20:09
Doesn't have a press conference to tell you things are fine.
20:11
It has a fixed supply of 21 million, a predictable schedule,
20:15
and no board of directors to call up and ask for a favor.
20:19
So do yourself a favor and study Bitcoin.
20:22
Not because the number goes up, but because the alternative is
20:25
holding something that a frozen central bank and a $34 trillion
20:29
debt load are quietly working against every single day.
20:33
Thank you so much for watching this video.
20:34
If you like what you see and you want to see more, make sure you
20:36
hit that like button below or you can subscribe to the simply
20:38
Bitcoin channel for more content like this.
20:40
We're coming out with it every single day.
20:42
Also, do not forget to hit that notification bell.
20:44
You can just leave us a comment. If you want to reach out to me
20:46
directly, I'm at run dance Bitcoin on X I'm oceans.
20:50
This is beyond Bitcoin. Until next time.