United States regulators have shut down Philadelphia-based Republic First Bank, marking the nation’s first banking failure of 2024. This development has ignited discussions within the crypto community as Bitcoin prices dip to $62,846, Ether (ETH) to $3,109, and several altcoins show slight declines following the announcement.
Zesh Marius Martocsan, CEO of X, expressed skepticism about traditional banking systems in light of Republic First Bank’s collapse, stating, “Another bank just collapsed, the Republic First Bank. Yeah… I think I’ll stick to Bitcoin.”
A pseudonymous crypto trader known as Pillage Capital sees the bank failure as an opportunity for crypto, stating, “Republic First Bank failure is worth a look since bank failures are the best possible narrative we can get for crypto.”
Crypto commentator Randi Hipper posed a thought-provoking question to her 87,100 X followers: “How many more need to fail before people start to be their own bank?”
Republic First Bank was seized by the Pennsylvania Department of Banking and Securities on April 26, with the Federal Deposit Insurance Corporation (FDIC) appointed as its receiver. The FDIC will assume nearly all deposits and assets of Republic Bank, as stated in an April 26 release by the agency. Republic First held approximately $6 billion in total assets and $4 billion in total deposits as of Jan. 31.
Additionally, the bank’s 32 branches across New Jersey, Pennsylvania, and New York will reopen under Fulton Bank’s management by the beginning of next week.
Rumors of potential banking failures in 2023 had previously caused minor spikes in Bitcoin’s price. However, this time, Bitcoin’s value has slightly decreased after the news. In the past hour, Bitcoin is down 1.16%, trading at $62,715, while Ether is down 0.58%, trading at $3,095, according to CoinMarketCap data. Altcoins have experienced a slightly more pronounced decline, with Dogecoin (DOGE) down 2.88% to $0.15 and Solana (SOL) down 1.79% to $136.
The closure of Republic First Bank adds to the challenges facing the banking industry. In 2023, the U.S. experienced five banking failures, according to FDIC data. Notably, First Republic Bank, an entity unrelated to Republic First, was acquired by JPMorgan in May 2023 following unsuccessful recovery attempts.
In March 2023, the Federal Reserve announced the closure of Signature Bank, citing “systemic risk” to the U.S. economy. Shortly after, Silicon Valley Bank and Silvergate Bank faced closures, with the latter opting for voluntary liquidation.
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