The bank run is burnt into the collective U.S. imagination for good reason. When the Great Depression hit, the savings of millions of Americans were wiped out when their banks collapsed. That’s why the Federal Deposit Insurance Corp. (FDIC) was introduced in 1933. Since then, not a penny of FDIC-insured funds has been lost when banks go under.
It’s a different story when your “bank” is a cryptocurrency firm. As crypto prices collapse, customers’ deposits are disappearing with them—or being swiped by the people behind the company. Unregulated markets are looking very much the same now as they did in the 1920s.
