American banking crisis is back, First Republic stock sinks, Bitcoin and gold surge higher

A week ago, we warned the cryptotips readers that another US banking crisis could be in the making. Back then we talked about the problems at banking giant Charles Schwab. This week it seems we might have been right, but now it’s First Republic Bank. You may remember, that’s the mid-sized bank which many of the larger U.S. banks lent $30 billion to in mid-March to make sure it wouldn’t collapse.

Now that First Republic has published quarterly figures, it shows once again how much this was needed. The bank’s stock lost 50% in one day and looks set to be the next domino to fall.

#Bitcoin $BTC is up 2.4% in the last 90 minutes after @CGasparino breaks the news that bankers working with First Republic Bank $FRB “expect eventual govt receivership.”

Price was $27,500 at the time of the tweet and is now $28,150. pic.twitter.com/aSjzFXiip6

— Matt Willemsen (@matt_willemsen) April 25, 2023

Bitcoin and gold, both of which were also seen as ‘safe havens’ during the previous banking crisis, went higher quickly. Bitcoin saw some profit taking overnight after it briefly traded close to $30k.

95% lower

Classic media is always quick to point out that crypto is volatile and that digital coins can easily drop 90% lower, demonstrating the risk of investing in crypto.

However, what do they say about mid-sized US banking stocks. In the last 4 months, since the beginning of 2023, the share of First Republic Bank, a medium-sized American bank, fell by no less than 95%.

First Republic $FRC 😵‍💫

Down another 40% today and now -93% YTD. pic.twitter.com/SxJPjTz7m2

— TradingView (@tradingview) April 25, 2023

Bitcoin, which is increasingly seen as a safe haven during the banking crisis, rose about 75% during the same period.

If First Republic were to topple later this week, it’s quite possible that institutional investors fear an extension of the troubles and we’ll see Bitcoin above $30k again.