Republic First Bank Closure Sparks Crypto Discussion Amid Market Dip
Summary:
The Republic First Bank in Philadelphia has been closed by regulators, marking the first U.S. bank failure of 2024. The development has triggered discussions within the cryptocurrency community and coincides with a minor dip in the value of Bitcoin, Ether, and other altcoins. The Federal Deposit Insurance Corporation (FDIC) has been appointed as the bank's receiver, taking over almost all deposits and assets. With 32 branches across New Jersey, Pennsylvania, and New York, the fallen bank had about $6bn in total assets and $4bn in total deposits. These branches will reopen under Fulton Bank. The past year has seen several banking failures, creating global linked impacts, especially in cryptocurrencies like Bitcoin.
The Republic First Bank in Philadelphia, USA, is now shut down by regulators, making it the first bank to collapse in 2024. This development has led to a discourse within the circles of those invested in cryptocurrency, as Bitcoin, Ether, and other altcoins experience a mild decrease after the news broke. Zesh Marius Martocsan, CEO of X, paraphrased it in a 26 April X post as another instance of banking failure, expressing his preference for Bitcoin.
Pillage Capital, a crypto trader who prefers to remain anonymous, took to X to discuss the significance of examining the Republic First Bank's failure on 26 April, arguing that financial institution failures provide the best storyline for cryptocurrency. Crypto pundit Randi Hipper posed a rhetorical question to her 87,100 X followers on the same day: how many more institutions need to collapse before individuals take charge of their banking needs?
The Pennsylvania Department of Banking and Securities took control of Republic First on 26 April, with the Federal Deposit Insurance Corporation (FDIC) being assigned as the custodian. According to an FDIC statement released on 26 April, the organization will manage almost all debits and take possession of all the bank's assets. The Republic Bank, which had close to $6 billion in total assets and $4 billion in total deposits as of 31 January, will have its 32 branches in New Jersey, Pennsylvania, and New York reopening under Fulton Bank as early as the coming week.
In 2023, even whispers of likely bank failures had an impact on Bitcoin's price, causing it to inflate momentarily. Despite this, the price has seen a marginal dip in response to current developments. The last hour's CoinMarketCap data reveals a 1.16% dip in Bitcoin, with its trading price at $62,715, and a 0.58% decrease in Ether, trading at $3,095. The market data further reveals that Bitcoin has been trading under the critical price mark of $65,000 in the past 24 hours. During the same time span, altcoins experienced a more pronounced dip, with Dogecoin and Solana falling by 2.88% and 1.79% respectively.
Last year proved to be a challenging one for the finance sector, with five U.S. banking institutions recorded as having collapsed, according to FDIC figures. JPMorgan took over First Republic Bank, a company without ties to Republic First, in May 2023 after its first attempts at recuperation fell short. In March of the same year, the Federal Reserve shut down Signature Bank to safeguard the national economy due to what it referred to as "systemic risk."
This occurred not long after the closure of Silicon Valley Bank was demanded. Silvergate Bank, another bank known for its openness towards cryptocurrency, declared one week earlier that it intended to wind down its operations and enter voluntary liquidation.
Published At
4/27/2024 5:20:00 AM
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