Bitcoin & Ethereum Price Jump Over 2% Each Amid Fears of First Republic Bank Crisis

Just a little over a month after the tragic collapse of the Silicon Valley bank in the United States – yet another bank seems to be teetering on the edge of collapse. First Republic Bank began experiencing issues back in March 2023 – and more recently in the past 24 hours, share prices of the First Republic Bank saw a near 50% crash as depositors in the bank pulled out over $100 billion in funds. This comes despite the $30 billion lifeline rescue package that was deposited in the bank by a consortium of 11 other banks to keep the boat floating. But now, things seem bleak.

On the crypto front however, right after the end of the US trading session, Bitcoin prices spiked well over 2%, almost at 3% to the $28,300 level while Ethereum inched closer to the $1900 level again. This rally was sparked in the aftermath of the FUD around another possible imminent bank failure.

This spike came immediately after Fox News Business Reporter Charles Gasperino broke the news that bankers working with First Republic Bank were expecting the institution to go into government receivership. Receivership is a mechanism that allows creditors to recover their funds that are experiencing a potential default and assists troubled firms in avoiding bankruptcy.

Read more on why did Ethereum Price fall by 13.5%

#Bitcoin $BTC is up 2.4% in the last 90 minutes after @CGasparino breaks the news that bankers working with First Republic Bank $FRB "expect eventual govt receivership."

Price was $27,500 at the time of the tweet and is now $28,150. pic.twitter.com/aSjzFXiip6

— Matt Willemsen (@matt_willemsen) April 25, 2023

Even data sourced from Santiment, a very well-known crypto analytics firm, suggested the correlation between Bitcoin and the S&P500 index was probably on the way out as the narrative of Bitcoin being a safe haven during a banking crisis once again begins to gather momentum.

🚀 Just minutes after US stock markets winded down their rough day, #crypto has had signs of life. With $BTC pushing for $28.5k & $ETH closing in on $1,900, these surges without reliance on the #SP500 are ideal for the market's independent sustainability. https://t.co/0XeNVf9Vaz pic.twitter.com/KeJ1408UiN

— Santiment (@santimentfeed) April 25, 2023

Exactly a month ago on March 26, Bloomberg reported that US authorities were looking to aid the ailing bank to shore up its structural challenges on its balance sheet by creating an emergency lending facility. However, those issues remained unresolved as First Republic Bank’s Q1 2023 results indicated that their total deposits had plummeted by over $100 billion.

This is a very grim reminder of the Silicon Valley Bank collapse that happened earlier last month, which had resulted in the second-largest stablecoin by market capitalization, USDC losing its peg briefly. Also, around the same time, another crypto-friendly bank, Silvergate Bank announced that it would be closing its doors after experiencing a run on deposits.

Additional read: Bitcoin Price Prediction

Will BTC price continue to gain?

BTC/USD | Source: TradingView

BTC price did see a minor correction of about 10.5% over the course of the past week, after nearly a month of unending rally. And now, after the news of the potential collapse of yet another bank in the US, Bitcoin’s narrative of being a safe haven during banking collapses is seemingly gaining momentum as Bitcoin price has gained almost 3% from the previous day’s lows.

While from a technical point of view, it is still below the $28,500 minor resistance level, things look to be moderately optimistic for the king coin, and thus eventually the crypto market as a whole, thanks to Bitcoin’s near 47% market cap dominance. All other technical indications point to broad base bullish momentum in the token and the recent correction was nothing but a small profit-taking event after a major rally. Thus, it is safe to assume that Bitcoin is still well-positioned to continue its rally soon!

Read More: Ethereum Price Prediction 2023