First Republic Bank's Decline Triggers Bitcoin Rally

04/26/2023

4,7

★

Bitcoin's price has risen above $28,000 after experiencing a 10% dip earlier this week. The increase in price comes as First Republic Bank's stock, FRC, has plummeted by almost 50%, causing concerns of another banking crisis.

The rise in Bitcoin prices happened concurrently with issues at First Republic Bank, which saw its shares drop by over 50% on 25 April. Currently, Bitcoin is trading at 28, 765 marking a 5% growth over 24 hours. Other major cryptocurrencies are also trading in green.

Source and Copyright: © TradingView

The bank could potentially be seized by the US government if it exhausts all private sector solutions, such as asset sales or finding a buyer, as stated by Fox reporter Charles Gasparino.

SCOOP (1/2): Bankers working w @firstrepublic bank say they expect eventual govt receivership for the ailing bank after it exhausts private sector solutions such as asset sales and finding a buyer, both of which appear difficult. Officials at the big banks believed the Feds were
— Charles Gasparino (@CGasparino) April 25, 2023

The crash in FRC's stock price was mainly due to the bank facing a $100 billion deposit exodus, with its deposits shrinking by 40% in the first quarter of this year. This decline has caused investors to worry about the possibility of another banking crisis, with market participants already gauging the possibility of the next Fed rate hike scheduled for the upcoming week.

Crypto analytics firm Santiment suggested that Bitcoin's correlation with the S&P 500 index may be diminishing as the narrative that Bitcoin is a safe haven during banking crises regained momentum.

🚀 Just minutes after US stock markets winded down their rough day, #crypto has had signs of life. With $BTC pushing for $28.5k & $ETH closing in on $1,900, these surges without reliance on the #SP500 are ideal for the market's independent sustainability. https://t.co/0XeNVf9Vaz pic.twitter.com/KeJ1408UiN
— Santiment (@santimentfeed) April 25, 2023

CEO Mike Roffler announced in a press release that the bank would be “pursuing strategic options” and “taking steps to meaningfully reduce our expenses to align with our focus on reducing the size of the balance sheet.” The bank plans to downsize its balance sheet, cut expenses, and lay off an expected 20% to 25% of its employees in Q2 to strengthen its financial standing.

First Republic Bank's issues have been ongoing since early March, with 11 major US banking institutions, including J.P. Morgan and Bank of America Corp., depositing $30 billion to assist the troubled bank, according to Bloomberg.

Subscribe to Cryptonica.News
on social networks

The materials found on the Cryptonica website shall not be taken as individual investment recommendations. The financial instruments or operations mentioned therein may not align with your investment profile or objectives. We assume no responsibility for any missing facts or inaccurate information in the texts. Cryptocurrencies are financial assets with high risk and volatility. Therefore, it is crucial that you conduct your own research on financial instruments and make independent decisions. Before engaging in any actions related to cryptocurrency, you shall study, understand, and comply with the laws applicable in your region and country.