The crises in the banking sector in the US seem to be never-ending. First Republic Bank is in the spotlight of all financial markets with significant deposit outflows and plans for asset sales.
According to Bloomberg News, the bank is planning to sell its assets worth $50 billion to $100 billion, including mortgages and securities, but is unable to find a buyer.
Trading of First Republic Bank’s shares has been halted eight times today, as panic continues to rise.
What’s going on with First Republic Bank?
After First Republic Bank announced that customers withdrew $100 billion in deposits in the first quarter, the stock price dropped nearly 50% yesterday. You can learn more details about the news by reading our latest article.
This situation has fueled the bank’s significant deposit outflows in recent times, and there are rumors that federal regulators may intervene with a bailout package to support its shaky financial condition.
Biden administration is on alert! Time consuming.
According to reports, the Biden administration is on high alert regarding the fate of First Republic Bank, particularly after the recent failures of Silicon Valley Bank and Signature Bank of New York, and the inability of its officials to support the bank’s shaky balance sheet.
Officials are saying that time is running out to provide reassurance to depositors and investors of the bank.
Bitcoin is on the rise
Following the banking crisis in March in the US banking sector, Bitcoin had a significant increase of approximately 50%, from around $20,000 to $31,000.
Afterward, Bitcoin fell down to $27,000, but this week it showed a 10% increase, coming back to around $30,000, following the news of the start of the First Republic Bank crisis.
In conclusion, recent developments in the global markets and banking crises are causing investors to reconsider the allocation of their portfolios. Experts are now saying that people no longer have confidence in banks. Particularly after the banking crises in the US, there has been an increase in demand for other digital currencies such as Bitcoin and gold.