Bitcoin registered a mild uptick following concerns of a new banking contagion. The king coin is up by nearly 6% in the last 24 hours as First Republic Bank [FRC] stock fell over 50% on April 25.
Charles Gasperino for Fox News Business first reported that First Republic Bank employees anticipate the bank being placed under government receivership.
Receivership is a strategy that helps distressed businesses avoid bankruptcy while allowing creditors to recover money that may be at risk of default.
On 25 April, US equities took a nosedive following First Republic’s disclosure of a significant reduction in first-quarter deposits.
First Republic Bank’s shares dropped 49% to an all-time low after announcing deposits of $104.47 billion, which were down 40.8% from December 31, 2022. The bank is contemplating a bigger rescue scheme that would involve selling $100 billion worth of assets.
In addition to that, 178 S&P 500 businesses are scheduled to report earnings this week. Analysts expect the S&P 500 to post a profit decline of less than 5%.
It is important to bring up fresh information from the crypto analytics platform Santiment that uncovered an intriguing pattern.
Data provided by Santiment suggested the relationship between Bitcoin and the S&P 500 may be waning as the narrative that Bitcoin is a safe haven in the midst of the banking crisis has started to resurface.
Bitcoin Emerges As An Attractive Option
Over the course of this year, financial institutions have suffered greatly as a result of the failure of multiple banks, particularly in the United States. Silvergate became one of the first legacy fintech institutions that fell victim to the crypto crash after it announced to write off its assets and closing its bank down.
Silicon Valley Investment Bank was closed down by the California Department of Financial Protection two days later.
The failure of Silicon Valley Bank [SVB] also raised concerns about a larger bank contagion, positioning Bitcoin as a substitute for traditional financial institutions as a place to store savings.
Enrico Rubboli, CEO of blockchain scaling solution Mintlayer, told Insider then,
The meltdown has directed a lot of attention to the permissionless and autonomous nature of Bitcoin for storing savings. Combined with a low CPI print, the price of bitcoin is pulling retail into the crypto economy again.