Bitcoin Ascends Above $28K As First Republic Bank Shares Plummet 50% Amid Fresh Banking Crisis Fear

After undergoing a 10% plummet last week, Bitcoin, the world's first-ever digital asset and the largest cryptocurrency by market capitalization, has now surged above the $28,000 price level.

The increase comes as fresh banking crisis fear spreads in the wake of the First Republic Bank (FRB) crash that saw its shares plummet by nearly 50%.

Bitcoin may have benefited from the new banking crisis fear brought about by the fall of the FRB, which has brought the total downfall of its shares to 93.32% since March of this year.

Matt Willemsen, head of research and content at Collective Shift, noted in a tweet Wednesday that the price of the maiden crypto immediately soared after Fox News reporter Charles Gasperino broke the news about First Republic bankers anticipating that the bank would soon undergo "eventual govt receivership."

In just 90 minutes since the news first came out, Bitcoin saw a 2.4% gain and jumped from $27,500 to $28,150.

Crypto analytics firm Santiment also pointed out that the narrative suggesting that Bitcoin is a safe haven during the banking crisis started to gather steam and underlined that the link between BTC and the S&P 500 could be falling off since Bitcoin quickly saw a 2.5% gain after the S&P 500 closed.

Industry watchers reportedly said one of the major reasons behind the crash of FRB was that its customers pulled $100 billion worth of deposits from the bank in March alone while its deposits shrunk by 40% in Q1 2023.

This number shocked analysts and even triggered concerns about the overall health of the banking system in the country.

Additionally, reports claiming that the U.S. government will seize the bank did not help FRB's situation and instead worsened it.

Gaspareino's tweet revealed that First Republic bankers already anticipate government receivership from the indisposed institution.

"Bankers working w @firstrepublicbank say they expect eventual govt receivership for the ailing bank after it exhausts private sector solutions such as asset sales and finding a buyer, both of which appear difficult," the Fox News reporter's tweet read.

"Officials at the big banks believed the Feds were poised last week to take over FRC just before its earnings announcement crushed shares," he added.

In March, traditional banks struggled with issues of liquidity and insolvency. Interestingly, Bitcoin has been the biggest beneficiary of this issue.

Last month, Silvergate, Silicon Valley and Signature saw bank runs that helped push the price of Bitcoin upward.

Bitcoin saw a 4.85% gain and was trading up at $28,749.76 with a 24-hour volume of $19,628,124,258 as of 5;07 a.m. ET Wednesday, based on the latest data from CoinMarketCap.