Crypto, Related Stocks Soar as First Republic Bank Falls to All-time Low

Crypto assets and stocks surge as First Republic Bank falls 35% to all-time low

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Wit Olszewski/Shutterstock modified by Blockworks

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Cryptocurrencies and related stocks soared Wednesday afternoon in New York as First Republic Bank shares hit all-time lows on reports the US government intends to stay out of the banking crisis. 

Bitcoin and ether gained as much as 9% and 6%, respectively, Wednesday before paring gains later in the day. Both tokens flirted with key resistance levels; $30,000 for BTC and $2,000 for ETH.

Stocks stayed in the green as well, with tech and crypto companies leading the rally. Crypto exchange Coinbase was up 3% at time of publication, while miner Hut 8 and business intelligence firm MicroStrategy surged 10% and 8%, respectively. Big Tech shares also swelled as Meta gained around 2% and Amazon earned close to 3%. 

Wednesday’s run comes as First Republic Bank, which lost $72 billion in deposits during the first quarter of the year, fell as much as 35% to a new low of $4.78 per share. The sell-off was triggered by reports that the US government would not be stepping in to assist the struggling bank. 

Stocks have historically been lower throughout the banking crisis, particularly following the most recent earnings season, plus an upcoming rate decision from the Federal Reserve has traders proceeding with caution. But it could be the perfect storm for crypto, analysts say. 

“A pick-up in market uncertainty should ironically be positive for risk assets as investors position for a monetary and fiscal solution that involves the easing of liquidity,” Noelle Acheson, author of Crypto is Macro Now and former head of market insights at Genesis, said. “However, there is a risk that expectations get ahead of themselves on this front (or, should I say even more ahead of themselves than usual?). This sets up an interesting situation for bitcoin.”

With another traditional financial institution on the decline, bitcoin’s investment thesis as an alternative to the traditional banking system is poised to shine right now, Acheson added. 

But, others question bitcoin’s current generally-accepted status as a ‘risk asset.’

“After the way that BTC spot prices and the associated volatility surface traded in 2022, it was nearly a foregone conclusion that BTC traded as a risk asset with the potential for violent crashes, similar to the behavior seen in equities,” analysts from Amberdata wrote in a report Wednesday. “Reflecting on the spot/vol activity witnessed in Q1 2023 we can quickly say that 2022 activity isn’t a precedent set in stone. So far, Q1 2023 has completely flipped 2022 on its head.”


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