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The consecutive collapses of several US regional banks have sent shockwaves through global financial markets. Data reveals that regional banking stocks persisted in their downward trajectory on Wednesday, following JPMorgan’s acquisition of First Republic Bank. PacWest Bancorp (PACW – NASDAQ) stock prices plunged nearly 12% in pre-market trading. Nonetheless, the pressing question remains: will the market endure another bank failure by the week’s end?
Bank Failures: Who’s Next in Line?
JPMorgan Chase (JPM.N) is purportedly set to acquire the majority of troubled First Republic Bank’s (NYSE: FRC) assets. Instead of experiencing a relief rally, banking stocks underwent substantial selling.
The precipitous decline of PacWest Bancorp’s share price has captured investors’ attention. It plummeted a staggering 28% in the previous session, reaching an all-time low of $6.55. Over the past five days, PacWest’s share price has decreased by almost 45%.
Simultaneously, another prominent US regional bank, Western Alliance Bancorp (NYSE:WAL), experienced a 15% decline, trading at $30.93, positioning itself on the list of potential bank runs. The stock price has, however, diminished by 53% in the past six months.
Banking stocks have remained volatile as the market confronted a fourth lender collapse within the first four months of 2023.
Ripple Effects of Bank Collapses on Bitcoin
The string of bank collapses in recent months has prompted heightened interest in Bitcoin and precious metals. The banking failures, which provided a much-needed boost to the beleaguered Bitcoin and cryptocurrency market, have escalated since Silicon Valley Bank set the precedent.
The crypto market appears to be capitalizing on the ongoing banking crisis, as its aggregate value has increased by approximately 1.5% in the last day, reaching $1.18 trillion. Bitcoin (BTC), the leading cryptocurrency, has seen its price rise by 2% in the past 24 hours. Moreover, the BTC price has appreciated by 28% in the last 60 days. Surpassing the $30,000 threshold, Bitcoin is currently trading at an average price of $28,576 at the time of writing.
