Bitcoin About to Rally? The United States government will save the First Republic
Breaking News: As Reuters just reported, US officials are currently coordinating urgent talks to save the troubled First Republic Bank (FRC) – for Bitcoin, this could mean rally time again if history repeats itself as it has in recent weeks. Already on Tuesday, BTC experienced a sudden upswing after First Republic Bank released its quarterly report with devastating numbers.
Thus the narrative that first appeared on March 10 repeated itself. After the collapse of Silicon Valley Bank and Silvergate, the news of a bank failure acted as a trigger for several upward movements in Bitcoin. And First Republic Bank could be another argument that increases confidence in Bitcoin and weakens confidence in the banking system.
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As private sector efforts led by the bank’s advisers have yet to reach an agreement, US officials have now apparently intervened in the situation surrounding First Republic Bank, Reuters reports. According to three anonymous sources, the Federal Deposit Insurance Corporation (FDIC), the Treasury Department and the Federal Reserve will be involved in the talks.
The authorities are said to have started planning meetings with financial firms to organize a rescue operation in recent days. Remarkably, a bailout could again take place over the coming weekend to cushion the impact on the traditional financial system.
According to Reuters’ anonymous sources, the government’s involvement is likely to help bring more parties to the negotiating table, including banks and private equity firms. However, the US government reportedly favors a deal with the private sector, but involvement is still not out of the question.
U.S. officials believe a private sector solution would be better than placing First Republic under FDIC receivership, according to two of the sources.
“We are in discussions with multiple parties regarding our strategic options as we continue to serve our customers,” First Republic said in a statement. Meanwhile, the FDIC, the Treasury Department and the Federal Reserve have been silent.
Ultimately, the parties involved have not made a decision on how to proceed. According to Reuters, an agreement is still not certain. The most problematic aspect of the involvement of other large banks may be the initial situation.
As shown in the quarterly report for the first quarter, the rise at the bank was more dramatic than previously known. The bank had reported that customers had withdrawn nearly $100 billion in deposits in March. Only because other big banks stepped in with $30 billion in March, worse was prevented for the time being. But even that wasn’t enough.
At press time, the Bitcoin price was at $29,454. Today marks the most important day of the week for the market with the release of the Personal Consumption Expenditure Price Index (PCE) at 8:30am EST (2:30pm CET).
February’s core PCE was +0.3% on a monthly basis, below the forecast of +0.4%. For March, analysts expect an unchanged increase of +0.3%. On an annual basis (YoY), an increase of 4.5% is expected, up from 4.6% last month. If the core inflation rate falls, a bullish response is expected in the Bitcoin market.
Featured image from iStock, chart from TradingView.com
