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

article-image

Wit Olszewski/Shutterstock modified by Blockworks

share

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.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit