Bitcoin to ‘take another leg up’ as trillions could potentially go to bailout First Republic Bank: Arthur Hayes
BitMEX co-founder and crypto veteran Arthur Hayes predicts that Bitcoin (BTC) will rally on the latest US banking woes.
Hayes says to his 376,200 Twitter followers that he believes the current uncertainty surrounding First Republic Bank (FRC) will likely lead to the Federal Reserve injecting more liquidity into the market, which could send risk assets like BTC higher.
Hayes says that with a possible takeover by First Republic Bank (FDIC) of First Republic Bank due to its financial uncertainty, the Feds may expand the emergency loan program they established last month to rescue ailing banks.
The Bank Term Funding Program offers one-year loans with the intention of easing liquidity pressures and helping banks cover depositors. Some have estimated that this could result in up to $2 trillion in liquidity based on the number of banks that can use it.
According to Hayes, certain loan security requirements limit the financial assistance the federal program can offer First Republic. But Hayes believes this could prompt the Feds to expand the program’s eligibility requirements, resulting in more market liquidity.
“Another Friday, another US bank on the brink of being killed by the FDIC.
The problem with FRC is that their balance sheet has few Treasuries and a lot of other dog games like commercial real estate loans that do not qualify as collateral for the Bank Term Funding Program. Therefore, unless some muppet bank decides to bail out the FRC, expect the Bank Term Funding Program to be expanded over the weekend to allow other types of loans to be eligible to be exchanged for newly printed dollarz (US dollars).
And then BTC will take another step up as another few trillion dollars are added to the category. Money Printer go Brrr!!!”
Bitcoin is trading at $29,416 at the time of writing, down 0.4% in the last 24 hours.
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