Cash is king: US citizens putting more money in banks than ever

Banks have more cash than ever before—largely due to the coronavirus pandemic, figures from the Federal Reserve show.  

Deposits have never been so high—growing by $865 billion in April alone, CNBC reported. Deposits in total have increased by $2 trillion since January after record amounts of cash were pumped into US bank accounts to help with COVID-19 chaos. Money in bank accounts now stands at a whopping $15.4 trillion, June figures show. 

The flood of money is due to the US government doling out trillions of dollars to help its citizens with the economic hardships brought on by COVID-19 lockdowns; an unlimited bond buying program by the Federal Reserve; and people hoarding money because of uncertain times. 

That money is sitting in bank accounts. The biggest US banks—JPMorgan Chase, Bank of America and Citigroup—have experienced astronomical growth, CNBC reported. But there is such a surplus of cash, CNBC reports, that banks don’t quite know what to do with it. 

This seemingly endless supply of cash—globally, not just in the US—could lead to a crash in the price of the dollar, US economist Stephen Roach recently predicted. 

Others have said that the constant money printing could benefit Bitcoin. 

Huge growth in central bank easing and government debt could lead people to invest in alternative assets such as the world’s biggest cryptocurrency.  

Proponents of the safe-haven theory believe that Bitcoin is uncorrelated with global markets, including the US dollar, and is a safe bet in times of tough markets. Though Bitcoin crashed in the middle of March along with global markets, it has since bounced back—and it did so well before the stock market recovered. 

With money being handed out like never before and people hedging their bets on other assets due to inflation possibly being just around the corner, more eyes might start to shift towards cryptocurrencies. 

Could this be Bitcoin’s moment?