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The price of Bitcoin is sitting just under $30,000 after surging over $3,000 on Wednesday. The price move comes at the same time as the United States banking sector hits another obstacle as First Republic. Bank sheds 50%.
Bitcoin ($BTC) is currently sitting at $28,874.16 according to CoinGecko, a 6.6% increase from the last month’s trading value. Over the course of Wednesday, the price of the leading cryptocurrency hit $30,025.72, the highest price it has seen since last year May. While it’s seen a correction to sit just below $29,000, fear in traditional banking suggests it might rise again.
The crash of American banks
After a quarterly report showed withdrawals higher than anticipated, shares in First Republic Bank fell rapidly. Over $100 billion was withdrawn from the bank in March, drawing uncertainty about the solvency of the bank.
First Republic Bank’s crash in investment follows other banks in the country facing massive challenges. In March, the crypto-friendly Signature Bank was shut down as a result of regulatory issuers facing a lawsuit owing to “false and misleading” statements. Silicon Bank also saw a collapse due to insolvency and liquidity issues. Despite being cryptocurrency-friendly banks, the uncertainty in the traditional finance industry has drawn more to Bitcoin and cryptocurrency as a safe haven assets against both inflation and banking concerns.
BitMEX CEO Arthur Hayes weighed in to Decrypt on the matter. The head of the crypto exchange suggested that cryptocurrency and gold are opportunities to hedge against the risks in traditional banking:
“Everyone is going to take an ‘L’ unless they get some crypto or some gold—some hard asset that’s outside of the traditional banking system.”
Cryptocurrency and gold climbs while US dollar and stock drop
While Bitcoin enjoys a climb since the news of First Republic Bank’s crash, gold has seen an increase with a 0.75% rise. At the same time, the dollar index has shed 0.31% against other leading global currency. The stock market has also dropped off with the S&P 500 and Nasdaq 100 dropping by nearly 1.6% and over 1.01% respectively.