While Bitcoin still maintains a somewhat close correlation to the S&P 500, the digital currency is now being pitched as a better alternative to traditional banking.
The price of Bitcoin (BTC) is dramatically on the rise despite starting the day with a bearish slump. At the time of writing, the premier digital currency is changing hands at $28,810.19 after printing a 5.41% growth over the past 24 hours. Riding on its current outlook, the cryptocurrency is now paring off the losses it accrued in the trailing 7-day period in what might spell a positive close to the week. Surprisingly, Bitcoin’s latest upsurge comes at the heels of growing concerns about the future of First Republic Bank (NYSE: FRC) which has been recording some forms of stability in both its liquidity and share price.
In its latest earnings report, First Republic Bank revealed that its deposits plummeted as much as $100 billion for the first quarter.
The performance figures the company reported showed that its revenue plunged by 13.4%. The regional bank’s net income also came in at $269 million, a figure that represented a 32.9% slump from the year-ago period. Despite the obvious hole in its balance sheet, the company’s Founder and Executive Chairman, Jim Herbert, and CEO Mike Roffler, tried to allay investors’ fears in a joint statement.
“With the stabilization of our deposit base and the strength of our credit quality and capital position, we continue to take steps to strengthen our business. We remain fully committed to serving our communities, and we are grateful for the ongoing support of our clients and colleagues,” the duo said.
Despite these reassurances, the shares of the bank recorded one of its worst days since it went public, dropping as much as 49.37% to $8.10 per share. The 4.69% recovery in the Pre-Market is yet to allay the concerns that FRC may end up like Silicon Valley Bank (SVB).
First Republic Bank Crisis: Bitcoin to the Rescue
There are a number of solutions that have been directed to help FRC get back on its feet and Bitcoin is the less clamored one. While Bitcoin still maintains a somewhat close correlation to the S&P 500 Index (INDEXSP: .INX), the digital currency is now being pitched as a better alternative to traditional banking for anyone looking to keep custody of their money.
It is ironic that Bitcoin picked up pace as First Republic Bank was seeing a major selloff, however, this can be tagged a crucial vote of confidence on the asset’s technology, ecosystem, and underlying economics.
The digital currency has been on a promising year for the better part of April. While this week started roughly, the current resurgence has helped Bitcoin maintain a 74.39% growth in the Year-to-Date (YTD) period. This not only surpasses the S&P 500 but is also significantly higher than many digital currencies around today.
Bitcoin’s decentralization, immunity from control, and growing demand has been cited as some of the reasons why the cryptocurrency is a better investment asset than FRC or most stocks.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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