Bitcoin rises as concerns over First Republic Bank escalate

Bitcoin rises as concerns over First Republic Bank escalate

First Republic Bank shares fell 50% after it reported a dramatic slump in deposits. Photo: Spencer Platt/Getty

The price of bitcoin has jumped 4% today after crisis hit First Republic Bank's shares tumble nearly 50% as investors question its future.

The fall in First Republic Bank stock came a day after the US bank said customers had pulled more than $100bn (£80.25bn) from their accounts amid last month's banking panic.

After the collapse of Silicon Valley Bank (SIVB) in early March, and amid concerns over other mid-tier US lenders, the entire cryptocurrency market cap increased, with bitcoin breaching $30,000 two weeks ago, marking the first time the digital asset had reached this level in 10 months.

However, since last week, bitcoin's price has retraced 9% after breaching the psychologically important $30,000 mark, while ether's price declined 14% after peaking above $2,100 in mid-April.

Read more: Crypto live prices

Support or resistance for both bitcoin and ether often concentrates around large whole numbers and today the price of both digital asset has increased.

Bitcoin (BTC-USD) is edging back towards the $30k mark, rising 4% in the past 24 hours to $28,400, and ether (ETH-USD) has climbed 2.5% to $1,862.

According to Coingecko, the global cryptocurrency market cap today stands at $1.23tn, up 2.5% in the last 24 hours.

Bitcoin reaching $30,000 aligned with the upper range of its Bollinger Bands, which plot an asset's 20-day moving average and calculate two standard deviations above and below the average.

Read more: Philip Hammond warns of 'real risk' to London financial services from EU crypto bill

In the past 24 hours, the majority of leveraged trades that were liquidated in the crypto market were short positions as prices rose after days of declining value.

According to data from Coinglass, in the past 24 hours, 25,602 traders were liquidated, with 75% of these holding short positions.

Trouble brewing amongst mid-tier US lenders

First Republic (FRC) shares tumbled nearly 50% in the last 24 hours as investors questioned its future after customers withdrew over $100bn amid a banking panic, marking the bank as one of the most at risk of failure.

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The bank is now pursuing strategic options, such as cutting costs by shedding 20% to 25% of its workforce.

The collapse of Silicon Valley Bank and New York's Signature Bank (SBNY), along with troubles at Credit Suisse (CS), have raised fears of a looming crisis in the banking sector.

Read more: Bitcoin could rise to $100k by 2024, says Standard Chartered, even as prices collapse

US Federal Reserve monetary policy decisions over the past year have impacted bond values. As interest rates increase, the market value of bonds already held by lenders, such as Silicon Valley Bank, have decreased.

As spooked investors are withdrawing their money from crisis-hit banks, these lenders have been forced to sell their older bonds at a loss in order to fund customer redemptions.

Watch: Philip Hammond warns of 'real risk' to London financial services from EU crypto bill | The Crypto Mile

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