Bitcoin prices have rebounded as a drop in First Republic Bank (FRB) deposits raises fears of a new banking crisis in the US.

Bitcoin (BTC) price skyrocketed more than 3% in the past 24 hours due to concerns about the possible bankruptcy of another bank as shares of First Republic Bank (FRC code) fell more than 50% before yesterday's close .

Previously, FRB had a problem in early March, causing 11 major banking institutions in the US, including J.P. Morgan and Bank of America Corp, had to inject $30 billion to rescue. Santiment crypto analytics data indicates that the correlation between Bitcoin and the S&P500 may be decreasing as the narrative that Bitcoin is a safe haven amid a banking crisis once again begins to emerge.

Just minutes after US stock markets winded down their rough day,#cryptohas had signs of life. With $BTC pushing for $28.5k & $ETH closing in on $1,900, these surges without reliance on the#SP500are ideal for the market's independent sustainability. https://t.co/0XeNVf9Vaz pic.twitter.com/KeJ1408UiN

— Santiment (@santimentfeed) April 25, 2023

According to the Head of Research at Australian cryptocurrency education platform Collective Shift, the price of Bitcoin increased immediately after news that bankers were working with the FRB and expected the organization to be taken over by the government to avoid bankruptcy.

Bloomberg previously reported that US authorities are also considering creating an emergency lending facility to support the bank in overcoming structural challenges with its balance sheet.

Anonymous sources at the time also revealed that although the FRB was taking liquidity concerns seriously, US officials were still optimistically claiming the bank's deposits were 'stable' and not There is a risk of massive and severe withdrawals. This immediately caused regulators to face a crisis, forcing the closure of Silicon Valley Bank. Obviously the reassuring words from US officials were not accurate.

On April 23, this bank's first quarter financial report showed that total deposits had plummeted by more than 100 billion USD. FRB plans to shrink its balance sheet and cut costs by cutting executive salaries, reducing office rent and planning to lay off 20% to 25% of employees in the second quarter. They are required to ' Consider strategic options' to strengthen your financial position as quickly as possible.

The banking crisis has caused heavy damage to financial institutions in the world's number one economy from the beginning of the year until now. Silvergate Bank announced it would close after liquidity dried up on March 8. Two days later, Silicon Valley Bank was forced to close by the California Department of Financial Protection.

Despite the turmoil, US Treasury Secretary Janet Yellen affirmed in her speech from the Financial Stability Oversight Council (FSOC) meeting at the weekend that the US banking industry remains strong and resilient. Stable position and abundant liquidity.

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