The shares of a number of US banks witnessed a sharp decline just hours after the chair of the FED dubbed the banking sector as being resilient. A regional bank, PacWest Bancorp fell by a whopping 52.5% during the after-hours trading amid the possibility that the bank might explore a series of strategic options anytime soon. This bank has become the latest victim of the ongoing banking crisis in the country.
According to a number of sources, the bank is considering a sale or a capital raising. Several other banks including Western Alliance Bancorp fell by 22.4%, Metropolitan Bank by 16.2%, and HomeStreet by 7.8%, acording to Acquire.Fi and other sources. These are the banks that were hit the hardest. The Metropolitan Bank used to offer services to a number of cryptocurrency firms` but had to call it quits as the bank was not satisfied with the way the crypto industry was developing.
Crypto gaining momentum as US Regional Bank stocks tumble after hours:
PacWest, $PACW: ⬇️60%
Western Alliance, $WAL: ⬇️30%
Metropolitan Bank, $MCB: ⬇️20%
Valley National, $VLY: ⬇️15%
HomeStreet, $HMST: ⬇️11%
Zions Bank, $ZION: ⬇️10%
KeyCorp, $KEY: ⬇️8%
Seems like time to #HODL
— Acquire.Fi (@Acquire_Fi) May 4, 2023
Furthermore, the Chair of the FED, Jerome Powell, tried putting an end to increased concerns in the banking sector by announcing an interest rate hike of an additional 25 basis points.
“Conditions in [the banking] sector have broadly improved since early March and the U.S. banking system is sound and resilient. We will continue to monitor conditions in the sector.”
However, the crypto community mocked Powell’s belief in the improvement within the banking sector. Many Twitter users were quick to point out how more than $500 billion dollars were wiped out amid bank failures since last month.
Could Bitcoin (BTC) Hit the $36K Despite the FED Moves?
Bitcoin has established itself as the best alternative amid the ongoing banking crisis. Many analysts believe that the recent interest rate hike by the FED might be the last for this cycle, and this might set the stage for a potential rally of Bitcoin.
Analysts believe that the price of the largest cryptocurrency by market cap might surge to the $35k-36k mark anytime soon. At the same time, transactions on the Bitcoin network have achieved new heights as the total number of active addresses on the network continues to remain strong.
At the time of writing, Bitcoin (BTC) surged by approximately 1.43% in the previous 24 hours, inevitably pushing the trading price up to $29,060. The total market cap of the cryptocurrency is currently $562 billion.