US regulators have taken decisive action by shutting down Republic First Bank, marking the first bank failure of 2024. This development has sparked a divide among those involved in the cryptocurrency trade, with Bitcoin, Ether, and altcoins experiencing a slight boost in the aftermath.
Pillage Capital, a prominent crypto trader, believes that the collapse of Republic First Bank presents a compelling case for the cryptocurrency market, as bank failures provide a strong narrative in favor of crypto.
According to a recent post by Zesh Marius Martocsan, CEO of X, the Pennsylvania Department of Banking and Securities seized Republic First Bank on April 26. Subsequently, the FDIC was appointed as the receiver of the failed bank. In accordance with the FDIC’s statement dated April 26, the new federal bank will assume responsibility for virtually all deposits and assets previously held by Republic Bank.
Republic First Bank had amassed approximately $6 billion in assets and nearly $4 billion in total deposits as of January 31. Additionally, Fulton Bank recently completed the integration process, whether through a merger or acquisition, establishing its presence in the region by the beginning of the following week.
Given the tumultuous state of the banking industry this year, the news of FRB’s failure comes as no surprise. The FDIC’s report revealed a total of five banking failures in the US in 2023. It is worth noting that Republic First Bank had no affiliation with First Republic. However, JPMorgan Slate stepped in and acquired Republic First Bank in May 2023 after initial recovery efforts fell through.
In March 2023, the Federal Reserve made the decision to close down Signature Bank, citing “systemic risk” as a means to safeguard the US economy and address concerns regarding stability and growth.
Adding to the industry’s challenges, Silicon Valley recently faced regulatory scrutiny, resulting in closure. Just a week prior, Silvergate Bank, known for facilitating crypto-industry transactions, announced its intention to cease operations and undergo voluntary liquidation.
The impact of these events on the market can be seen in the recent price fluctuations. Bitcoin has experienced a 1.16% decrease in the past hour and is currently valued at $62,715 on CoinMarketCap. Ether, on the other hand, has seen a 0.58% decline and is now trading at $3,095. Altcoins have been hit harder, with Dogecoin dropping by 2.88% and Solana experiencing a 1.79% decline over the same period.
Overall, the closure of Republic First Bank has sparked a shift towards cryptocurrencies, as investors seek alternative banking solutions amidst the turmoil in the traditional banking industry.