American regulators have issued a full shutdown of Republic First Bank, headquartered in Philadelphia, marking the first bank failure in the United States for 2024. This development has caused a division among observers and investors in the cryptocurrency market. In the aftermath of the announcement, Bitcoin, Ether, and various alternative cryptocurrencies experienced modest price increases.
The collapse of Republic First Bank has triggered a shift towards cryptocurrencies.
Pillage Capital, a crypto trader, suggested that the bank's failure is significant, as such events serve as a compelling narrative for the crypto market.
In a post, Zesh Marius Martocsan, CEO of X, commented, "Another bank just collapsed, the Republic First Bank. Yeah… I think I’ll stick to Bitcoin."
On April 26, the Pennsylvania Department of Banking and Securities took control of Republic First Bank, subsequently appointing the FDIC as the receiver. According to the FDIC's statement dated April 26, the new federal bank will manage virtually all deposits and assume all assets of Republic Bank.
Republic First's balance sheet was supported by 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.
Calls for self-banking arise amid industry turmoil.
In 2023, despite whispers of a potential bank run shaking the global financial community, BTC's price experienced only a brief and minimal decline following the disclosure of this information.
The news regarding FRB emerges amidst a challenging year for the banking sector. According to a report by the FDIC, five banking failures were recorded in the U.S. in 2023. It's important to note that Republic First Bank is not associated with First Republic. In May 2023, JPMorgan Slate acquired Republic First Bank after initial recovery efforts fell through.
In March 2023, the Federal Reserve made the decision to shutter Signature Bank, citing 'systemic risk' concerns aimed at safeguarding the U.S. economy and ensuring stability and growth.
This development follows the closure of Silicon Valley due to regulatory oversight. Additionally, a week prior, Silvergate Bank, which facilitated transactions in the crypto industry, announced its closure and voluntary liquidation.