3 Cryptos That Benefit From the Banking Turmoil the Most


  • The banking turmoil may continue later this year, which will be a blessing for these three cryptos to buy.
  • Bitcoin (BTC-USD): Time-tested and proven track record of safety makes it very compelling during bank runs.
  • Paxos Gold (PAXG-USD): Gold surged in March, and it will do so again if the turbulence in the financial sector persists.
  • Ethereum (ETH-USD): Second to only Bitcoin, there’s no doubt about the safety of Ethereum.
Cryptos to Buy - 3 Cryptos That Benefit From the Banking Turmoil the Most

Source: FabrikaSimf / Shutterstock

The banking crisis in March had a negative impact on many investors in the financial sector. However, there are certain safe cryptos that investors should consider buying, as the crisis was a profitable time for them. Bitcoin (BTC-USD) saw a significant increase from its low point of just over $20,000, rising above $28,000. It also performed better than many other altcoins, which is unusual during market rallies.

This trend indicates that safety is becoming increasingly important to investors when making investment decisions. Cryptocurrencies are particularly unique as they are fully decentralized and cannot become bankrupt or experience significant inflation. For example, Bitcoin has very low inflation rates and high demand, making it one of the safest assets to hold during a banking crisis. Additionally, investors have complete control over their assets, which is an advantage over banks that may restrict withdrawals.

With that in mind, these three are the three cryptos to buy:

BTC-USD Bitcoin $29,299.30
PAXG-USD PAX Gold $1,990.15
ETH-USD Ethereum $1,898.52

Bitcoin (BTC)

man in glasses holding a coin that has the Bitcoin (BTC-USD) logo
Source: Shutterstock

Bitcoin has been a major beneficiary of the banking crisis and is poised to continue benefiting from future disruptions in the financial industry. It stands out from other assets because it is not connected to the banking sector, and its transactions are decentralized. No central authority can stop or censor them like with bank transactions.

Additionally, its supply is fixed through an algorithm, which prevents high inflation. These features make Bitcoin a reliable hedge against risks and uncertainties in the traditional financial system. Thus, it’s no surprise that so many investors bought Bitcoin in March.

That’s not all, though. There are catalysts ahead for Bitcoin that could increase its price even if banks don’t go through a crisis. One is the Bitcoin halving event in 2024, which will reduce the number of new BTC created every 10 minutes by half. This will create a substantial gap between supply and demand, driving up the price. Furthermore, the Federal Reserve is expected to cut rates later this year and stimulate the economy. The looser monetary policy could boost Bitcoin even more, so it’s the top crypto to buy if you wish to benefit from the banking crisis, at least in my book.

Pax Gold (PAXG)

Paxos crypto logo on conceptual, high-tech looking blockchain graphic
Source: shutterstock.com/Mahambah

Pax Gold (PAXG-USD) is a unique cryptocurrency backed by physical gold. Each PAXG token represents one fine troy ounce of London Good Delivery gold stored in professional vaults. This means that PAXG has a stable value that is synced with the price of gold.

PAXG can offer you a hedge against another potential banking crisis, even though it might not give you explosive gains. Gold has a long history of being a store of value and a hedge against inflation and currency devaluation. It is also seen as a protection against systemic risk and geopolitical uncertainty. In other words, gold tends to perform well when everything else goes wrong, and the recent price action has proved the same.

The broader cryptocurrency market also suffers from flash crashes and is always subject to manipulation, something that Pax Gold seems to be free from.  This crypto is not totally risk-free, as it depends on the Paxos Trust Company, but I still believe it is among the safest to buy.

Ethereum (ETH)

A stack of ethereum coins
Source: shutterstock

Being the second largest cryptocurrency by market capitalization, Ethereum (ETH-USD) is also one of the major beneficiaries of the “crisis” in the banking sector. Along with Bitcoin, Ethereum’s blockchain is among the most secure and decentralized in the crypto space. Many regard it as a safe place to keep their money when two large regional banks collapsed last month.

Of course, this may be a “boring” pick as it’s another one of the big cryptocurrencies. But I would caution against investing in smaller cryptos, specifically if you’re looking to avoid exposure to a resurgence of volatility in the banking sector. Bigger projects or projects backed by commodities with large market caps have little institutional ownership and can insulate themselves from the storm. Thus, ETH is among the top cryptos to buy in case there is further instability in the banking sector.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.

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