Thus, bankruptcy deposits are increasing. Above, actually. According to data, July has seen 71 large companies in the American balance sheet. This is the highest monthly number since the peak of pandemic closings in 2020. Throughout the year, we have already exceeded 446 large deposits. This officially puts us above the levels we saw during the worst cocovio disturbances.
It makes you ask you what’s going on. The hardest shot seems to be industrial and consumer -oriented companies. The big names you have probably heard, like Rite Aid and Forever 21, are back in court after previous attempts to repair their finances simply did not work. The main culprit? Refinancing. The debt which was super cheap at service just a few years ago matured and reproduced at much higher prices.
Where is the money going?
This is where things become a little interesting. When the credit tightens like this, investors are starting to look for places to put their money that are not linked to the traditional business or banks system. In 2020, we saw a similar thing happening. Bankruptcies have increased, and shortly later, the price of Bitcoin and the volume of trading increased. This seems to happen now, with regular money flowing in these new ETF Bitcoin, even if the company credit is weakening.
But it’s not easy. The Fed is stuck. They still have a break in break, but there is a clear division among them for the first time in decades. Some want to reduce rates to relieve pressure on businesses, but others are worried about inflation, which is still lying around. Producers’ prices jumped in July. And with such high prices, the cost of goods does not become less expensive.
A change of credit
This pressure strikes the most small businesses. A surprising number of them are not even profitable for the moment. Regional banks shooting on loans, there is a real gap that opens for business financing. And maybe surprising, Crypto is starting to play a role in filling this void.
I’m not talking about wild speculation either. Tokenized US treasury bills increased to more than $ 7 billion. These are people who use blockchain to buy government debt. Stablecoins move billions of dollars in transactions, offering companies a faster way to pay payments than traditional banks. It is a small part of the overall image, for sure, but it develops where traditional credit contracts.
All this happens while the market is waiting for what could happen. More FNB Crypto for active ingredients like Solana and XRP could be approved soon, opening the door to even more institutional money. This creates strange tension. Crypto could be a coverage if inflation remains high, or if it could be trained if the stress of the Empire credit. For the moment, it seems to be a bit of both.
