Banks Fall = Bitcoin Rises
Bitcoin has surged by ~4% in the past 24 hours, amid concerns of a possible bank failure. First Republic Bank’s (FRB) shares fell by more than 50%, leading to reports that the institution could be heading into government receivership. The news pushed Bitcoin upwards.
The correlation between Bitcoin and the S&P500 may be diminishing, as people realize Bitcoin is a safe haven during financial crises. FRB has been struggling since early March, with 11 major US banks depositing $30B to help the troubled bank.
Despite reassurances from US officials, it now appears that the bank faces liquidity concerns. On April 23, the bank reported a drop of over $100B in total deposits and stated that it would be pursuing strategic options to improve its financial position.
The bank is yet to reveal what these options are, but it plans to downsize its balance sheet, cut expenses and lay off 25% of employees. It might be a good idea to start slowly taking money out of banks…
