FRC - Bitcoin spikes as troubles at First Republic spark fresh traditional banking concerns

2023-04-26 10:10:54 ET

Bitcoin ( BTC-USD ) and other major cryptocurrencies shot up in Wednesday morning trading as troubles at First Republic Bank ( FRC ) sparked fresh concerns about the traditional banking sector.

Snapping its five-day losing streak, bitcoin ( BTC-USD ) surged 9.3% to $29.82K as of shortly before 10:30 a.m. ET, eyeing the $30K resistance zone that the token has had a tough time fully breaking out of throughout much of April.

Ethereum ( ETH-USD ), the world's largest altcoin, also jumped 6.7% to $1.94K, and cardano ( ADA-USD ) +8.4% , polygon ( MATIC-USD ) +8.5% and solana ( SOL-USD ) +7.8% .

The outsized upswings occurred less than a day after struggling regional lender First Republic ( FRC ) said it l ost more than $70B in deposits during the first quarter, bringing total deposits to $104.5B at March 31. It's now fighting to survive as the embattled bank seeks to convince other banks to buy $50B-$100B of its long-dated and mortgage securities in an effort to shore up its balance sheet.

Keep in mind that cryptos rallied last month perhaps as market participants sought alternative assets like bitcoin ( BTC-USD ) and gold (XAUUSDCUR) in the wake of three U.S. bank failures. Bitcoin has long been branded as a safe haven asset -- digital gold -- but it's still down some 60% from its November 2021 record high as many central banks across the globe hiked interest interest rates aggressively to squash persistently high inflation.

Earlier this week, Piper Sandler analyst Geoff Kendrick contended that bitcoin's ( BTC-USD ) price could reach $100K by the end of 2024, partly because the stresses in the banking sector helps to "re-establish BTC’s core use case as a decentralised, trustless and scarce digital asset."

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