Bitcoin has surged above $29,000 as investors seek out safe-haven assets amid fears of a potential U.S. banking crisis triggered by the steep decline of First Republic Bank’s shares. The San Francisco-based bank reported higher-than-expected withdrawals of over $100 billion in March, raising concerns about its solvency and sparking fears of a wider banking crisis in the United States. Regulators have already shut down Signature Bank, and Silicon Valley Bank has reportedly collapsed due to insolvency.
Bitcoin’s recent price surge can also be attributed to the possibility of fresh liquidity injections into the market from the Federal Reserve or other institutions in response to the uncertainty surrounding First Republic Bank. Although Bitcoin has fallen back slightly to just under $28,800, its current price – at the time of writing – it reflects growing recognition of the cryptocurrency as a potential safe-haven asset in times of economic turmoil.
Read more: Can Bitcoin’s bull rush to $30k stall?
On the brink of collapse?
First Republic Bank might be currently on the brink of collapse, with reports suggesting that the federal government and the US largest banks are reluctant to put together a rescue package. The bank reported significant deposit outflows in the first quarter, with its total deposits falling from $176.4 billion in the previous quarter to $104.5 billion in the first three months of 2023.
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