Bitcoin About To Rally? US Govt To Bail-Out First Republic
Breaking news: As Reuters just reported, US authorities are currently coordinating urgent talks to rescue the troubled First Republic Bank (FRC) – for Bitcoin, this could mean a rally once again if history repeats itself as in recent weeks. Already on Tuesday, BTC experienced a sudden recovery after First Republic Bank released its quarterly report with devastating numbers.
Thus, the narrative that first emerged on March 10 has repeated itself. After the collapse of Silicon Valley Bank and Silvergate, the news of a bank failure served as a trigger for several Bitcoin upward movements. And First Republic Bank could be another argument for increasing trust in Bitcoin and eroding trust in the banking system.
This is why Bitcoin was created
As private-sector efforts led by the bank’s advisers have yet to reach an agreement, US authorities have apparently intervened in the situation surrounding First Republic Bank, reports Reuters. According to three anonymous sources, the Federal Deposit Insurance Corporation (FDIC), the Treasury Department and the Federal Reserve would be involved in the negotiations.
Authorities have begun scheduling meetings with financial firms to organize a bailout in recent days. Notably, a bailout could take place again next weekend to mitigate the impact on the traditional financial system.
According to unnamed Reuters sources, government involvement is likely to help bring more parties to the negotiating table, including banks and private equity firms. However, the US government reportedly favors a deal with the private sector, but involvement is still not out of the question.
US officials believe a private sector solution would be better than placing the First Republic under FDIC administration, according to two of the sources.
“We are in discussions with various parties about our strategic options as we continue to serve our customers,” First Republic said in a statement. Meanwhile, the FDIC, the Treasury Department and the Federal Reserve remained silent.
Ultimately, the parties involved have not made a decision on how to proceed. According to Reuters, a deal is not yet certain. The most problematic aspect of involving other large banks may be the initial situation.
As shown in the Q1 quarterly report, the run on the bank was more dramatic than previously known. The bank said customers had withdrawn nearly $100 billion in deposits in March. Just because other big banks came in with $30 billion in March, the worst has been averted for now. But even that wasn’t enough.
At press time, Bitcoin price was at $29,454. Today marks the biggest day of the week for the market as the Personal Consumption Expenditure (PCE) Price Index is released at 8:30 am EST (2:30 pm CET).
February core PCE was +0.3% monthly, below the +0.4% forecast. For March, analysts expect an unchanged +0.3% increase. In the accumulated result for the year (YoY), an increase of 4.5% is expected, compared to 4.6% in the previous month. If the core inflation rate drops, an upbeat response from the Bitcoin market is expected.
Featured Image from iStock, chart from TradingView.com