In a larger sense, the 1907 precedent ties into a commonly expressed belief among crypto enthusiasts that the industry is re-living the last few centuries of evolution in financial markets at an accelerated pace. If you're looking for personal parallels: Sam Bankman-Fried, the founder of crypto exchange FTX, is playing the role of Morgan, making loans to and investments in troubled businesses. This time, losses in speculative crypto ventures have shaken faith in the crypto-based lenders they had borrowed from, and a similar rush to withdraw deposits. In its broadest outlines, the current crisis has been “almost identical” to 1907 so far, according Rasheed Saleuddin, a crypto watcher with a PhD in financial history from Cambridge University, specializing in the period around the Panic. Morgan stepped in to arrange loans to several troubled banks, restoring faith in the system. The worst of the crisis ended when the banker J.P. One of the largest trust companies in the city failed, and because financial firms were so intertwined, panic and bank failures spread throughout the country. Anxious depositors rushed to withdraw cash from New York trust companies that had lent money to copper speculators. The Panic of 1907 followed the failure of an attempt to corner the copper market. But within the industry, the historical precedent of choice dates much further back - 115 years, to be exact.
We’ve written about the parallels between the early stages of crypto’s ongoing financial meltdown and the last global financial crisis.
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