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The current struggles in the banking sector may last until 2025 according to the International Monetary Fund (IMF).
According to an IMF report published on Friday, banks could continue to see red through 2025. The document, which is a follow-up to April’s ‘Global Financial Stability Report,’ says the economic downturn occasioned by the The majority of cryptocurrency assets, along with the entire global financial sector have taken a sizeable hit in the last... More pandemic exacerbated weaknesses in the finance sector.
As part of the report, the IMF argued that banks’ revenues were already in decline even before the onset of COVID-19. An excerpt from the document reads:
Beyond the immediate challenges associated with the COVID-19 outbreak, a persistent period of low interest rates is likely to put further pressure on bank profitability in the coming years. Even once the global economy begins to recover from the current shock.
As previously reported by BeInCrypto, U.S. banking stocks are firmly in the red with many experiencing declines since the start of the year. Meanwhile, (BTC) is leaving these poorly performing banking stocks in the dust. The largest crypto by market capitalization is outperforming JPMorgan by about 300% year-to-date (YTD).
Indeed, JPMorgan’s Q1 profits for 2020 plummeted 69% when compared with earning calls for Q1 2019. Such is the revenue hemorrhage in the banking sector that Warren Buffett has been massively unloading Berkshire Hathaway’s stake in major U.S. banks.
Further profitability declines in the banking sector may work in Bitcoin’s favor. BTC is already showing a clear decoupling from the U.S. stock market. Further declines in the banking industry could see more investments flowing into Bitcoin, solidifying the BTC safe-haven asset narrative.
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