US banking crisis accelerates as government refuses to bail out First Republic, stock trading halted as Bitcoin hits $30,000
Stress on the legacy financial system is mounting as reports suggest the US government will not step in to bail out the collapsing First Republic Bank.
First Republic’s shares continue to plunge, and were stopped from trading five times this morning on the New York Stock Exchange (NYSE) due to extreme volatility.
The bank’s troubles took a new turn yesterday when it was revealed that more than $100 billion in customer deposits had fled the institution in March and that layoffs were inevitable.
It was previously expected that the US government would intervene to save the bank as it has done in similar situations in the past. However, a new report from CNBC says otherwise.
Sources reportedly told CNBC’s David Faber today that U.S. government officials are currently “reluctant to intervene in the First Republic bailout process,” adding further uncertainty to the ailing bank. The plight of First Republic comes despite 11 other institutions injecting more than $30 billion into the bank in an attempt to save it, and a last-ditch effort is reportedly being made to ask for more money.
First Republic’s stock (FRC) is trading at $6.50, and is now down about 97% from its all-time high, set in November 2021.
Meanwhile, Bitcoin (BTC) is up 8% on the day, potentially reacting to the crisis. The flagship cryptocurrency retouched $30,000 on Wednesday morning after hovering near $27,000 for several days.
While the majority of market participants have been expecting a significant period of consolidation for Bitcoin, some BTC bulls instead expect a new price parabola in the near future, one that predates the halving scheduled for next year, which will cut BTC miners’ rewards in half and has historically coincided with bull runs.
Pseudonymous analyst TechDev recently told his 409,000 Twitter followers that several technical indicators suggest that BTC is repeating the market structure of the bull cycle of 2015, when the king crypto rose from less than $200 to $20,000 in about two years.
“Early Phase of a Bitcoin Parabola, After a 1.5-Year Correction.”
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Featured image: Shutterstock/Yurchanka Siarhei
