With more bank stocks taking a nosedive on Wednesday, one chart of proprietary data from our friends at LikeFolio instantly jumped out at me:
Mentions of withdrawing a significant amount of money from a bank are up 82% year-over-year (YoY), which naturally leads to the question:
Where are people putting their money?
There’s an old saying that money goes where it’s treated best… and LikeFolio has data on where those places are.
One early beneficiary according to increased Purchase Intent mentions (the quarter-over-quarter change is especially worth noting since the bank failures started in March) is Discover Financial Services (DFS).
Up until December 2022, Discover was offering a unique cash-back-reward checking service, where customers earned 1% cash back on up to $3,000 in debit card purchases each month. It also has an online savings account with a 3.75% annual percentage yield (APY).
Discover’s savings accounts also don’t charge an account fee, have no minimum balance requirements, and are super easy to set up.
You also don’t need to visit a branch or other physical location; you just fill out a few forms, fund the account, and check your inbox for a confirmation that the account is up and running.
Again, money goes where it is treated best, and earning cash back from your debit card purchases AND having a savings account with a 3.75% APY is appealing.
But here’s something interesting and a little more surprising.
Look again at the first chart I shared about bank withdrawals:
Now take a look at the Purchase Intent mentions for the cryptocurrency Ethereum (ETH):
Even though the crypto ecosystem has earned — at times rightfully — a reputation as the “Wild West,” it has served as a refuge for many during the new banking crisis.
This makes sense when you consider the advantages offered by the blockchain (the technology underlying cryptocurrencies):
As recent events have made clear, all four of these characteristics are weaknesses within the mainstream financial system. So it’s no wonder people are seeing cryptocurrencies like Ethereum as appealing places to park their money.
Bottom line: In the wake of the recent bank failures, the trends show that people currently feel their money is being treated best at places outside the traditional institutions. Both Discover and Ethereum are benefiting from this trend and gaining popularity among consumers, and both are worth putting on your moneymaking watchlist to see whether this popularity translates into growth.