As concerns about the US banking industry resurfaced, Bitcoin surged 9% on Wednesday (April 26th) and broke through a key price of $30000, the first time in a week.According to CoinGecko data, the second largest cryptocurrency in the past 24 hours, Ethereum, has also climbed 7
As concerns about the US banking industry resurfaced, Bitcoin surged 9% on Wednesday (April 26th) and broke through a key price of $30000, the first time in a week.
According to CoinGecko data, the second largest cryptocurrency in the past 24 hours, Ethereum, has also climbed 7.1% to $1952.42, while other cryptocurrencies Solana and Cardano have both risen by about 8%.
The stock price of First Republic Bank plummeted nearly 50% on Tuesday and nearly 30% on Wednesday, setting a new record low. The bank had previously announced higher than expected withdrawals from customer deposits.
The Consumer News and Business Channel (CNBC) reported, citing sources familiar with the situation, that US officials are currently unwilling to intervene in the rescue process of the First Republic Bank; Reuters recently reported, citing sources familiar with the matter, that the bank has been considering various options, such as selling assets or establishing a "bad bank". Bad debt banks are a potential crisis management method for isolating problematic financial assets.
Later on Monday, the struggling bank released its first quarter results, with deposit outflows exceeding expectations last month, reaching $100 billion. The First Republic Bank stated that after disclosing the information, it will explore "strategic options", but analysts and investors question how much room for maneuver the bank actually has at present.
Art Hogan, Chief Market Strategist at Briley Wealth in Boston, said, "The problems at First Republic Bank may be unique... their path ahead is clearly difficult
According to CNN, the Federal Reserve's one-year interest rate hike aimed at curbing inflation has to some extent accelerated the arrival of the banking crisis. If the Federal Reserve continues to raise interest rates at its meeting in early May, it will be another test for the US banking industry.
In March of this year, with the collapse of Silicon Valley Bank, Bitcoin rebounded in turmoil. Industry observers said that in the latest round of uncertainty, the world's largest cryptocurrency was also experiencing a similar situation.
Stephane Ouellette, CEO of cryptocurrency brokerage firm FRNTFinancialInc., said that the trend of Bitcoin appears to be highly correlated with the banking industry, with First Republic Bank clearly being the focus. Google Trends data shows that the "First Republic Bank" and its stock code "FRC" are the most closely related search terms to Bitcoin in the United States in the past seven days.
In recent days, Bitcoin has been fluctuating sideways, with volatility returning to its low point in early March. At that time, the banking crisis had not yet erupted, but it became one of the catalysts for Bitcoin's biggest gains this year.
Matt Hougan, Chief Investment Officer of Bitwise Asset Management, said that the current troubles at First Republic Bank may once again drive the price trend of this cryptocurrency. Hougan said, "Cryptocurrencies rebounded during the banking crisis, and it seems that the banking crisis may not be over yet
A cryptocurrency executive said that the collapse of a series of banks such as Silicon Valley Bank last month has led investors to question the stability of traditional financial services.
Mikkel Morch, the chairman of investment fund ARK36, said that the industry's turmoil highlights that "perhaps blockchain based systems and cryptocurrencies with solid foundations and usage are as good, even better, safer, cheaper, and faster than traditional banking systems
In March of this year, the price of Bitcoin increased by 22% due to the crisis in regional banks in the United States, which exposed investors to the potential use of Bitcoin as a hedge against uncertainty and an alternative banking system. Bitcoin hit a 10 month high earlier this month, approaching $31000.
James Lavish, managing partner of Bitcoin Opportunity Fund, said that Bitcoin remains the last lifeboat of the current banking system and a leading venture capital asset. With the First Republic Bank now on the brink of collapse, Bitcoin represents a safe haven, rather than an uncertain bank deposit.
According to Kaiko, a crypto data provider, the 30-day rolling correlation between the bitrate and gold has been increasing since March, reaching 57%, a new high in nearly two years. In addition, the US dollar index has fallen and is expected to hit a new low since April 12th, when Bitcoin's trading price reached its highest point this year, and the relationship between the US dollar and Bitcoin is often inversely proportional.
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