US regulators have completely shut down Philadelphia-based Republic First Bank, the nation’s first bank failure of 2024. This creates a rift among those observing/investing in the crypto trade. Following the announcement, Bitcoin, Ether, and altcoins were slightly flattered.
Bank failure prompts shift towards crypto
Crypto trader Pillage Capital claimed that the Republic First Bank collapse is worth a look since bank failures are the best possible narrative we can get for crypto.
In an X post, CEO of Zesh Marius Martocsan said that
“Another bank just collapsed, the Republic First Bank. Yeah… I think I’ll stick to Bitcoin.”
On April 26, the Pennsylvania Department of Banking and Securities seized Republic First Bank. This event was followed by the appointment of the FDIC as the receiver of the failed bank. As per the statement dated April 26 from the FDIC, the new federal bank will handle practically all the deposits and acquire all the assets of Republic Bank.
Republic First’s balance sheet was built up on approximately $6 billion of assets, alongside nearly $4 billion in total deposits, as of January 31. In addition, Fulton Bank just finished the integration process, whether it be a merger or an acquisition. The bank established its first footing in the region by the start of next week.
Calls for self-banking amidst industry turmoil
In 2023, although the global financial community was shocked to hear whispers of a possible bank run, BTC’s price took a short-term dip and only a subtle dip immediately after receiving such information.
Over the last hour, Bitcoin has dropped 1.16% and is currently at $62,715 on CoinMarketCap. Ether has declined by 0.58% and is now trading at $3,095. Altcoins have been experiencing a sharper decline, with Dogecoin falling by 2.88% and Solana falling 1.79% less over the same period.
Source: CoinMarketCap
The news on FRB occurs during a rough year for the banking industry. A report by the FDIC indicated five banking failures recorded in the U.S. in 2023. Republic First Bank gained no tie with First Republic. A JPMorgan Slate, on May 2023, acquired Republic First Bank after initial recovery efforts were aborted.
The Federal Reserve decided to close down Signature Bank in March 2023. It justified its decision as a ‘systemic risk’ to safeguard the U.S. economy, referring to its concern regarding stability and growth.
This event comes just after Silicon Valley was closed due to supervision. A week before, Silvergate Bank, accommodating crypto-industry transactions, said it would be closing its operation and entering voluntary liquidation.
