The show Macro Markets, hosted by Marcel Pechman, which airs every Friday at 12 pm ET on the Cointelegraph Markets & Research YouTube channel, explains complex concepts in layman’s terms and focuses on the cause and effect of traditional financial events on day-to-day crypto activity.
In today’s episode, crypto analyst Pechman discusses how to analyze banks — importantly, how to avoid the erroneous market capitalization indicator, which had a $15.8-billion value for the defunct Silicon Valley Bank (SVB).
The enterprise value (EV) metric provides a much better picture of a bank’s balance sheet terms by subtracting net debt from market cap. Of course, Pechman first explains the relationship between banking valuation and cryptocurrencies, specifically Bitcoin’s ethos.
The video explores the 2018 denial of The Narrow Bank’s application, a bank that would not leverage client deposits and would only invest in United States Treasurys. This is a fascinating tale — you should watch the whole episode on YouTube for more information.
Pechman explains why an eventual crypto pump caused by a banking industry collapse would not be sustainable, as recession risks outweigh initial enthusiasm. The video goes on to compare bond (debt) markets to gold, equities and real estate.
The episode concludes with a quick look at unrealized losses and how the debt markets could spark a massive bull run for Bitcoin and cryptocurrencies.
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