Crypto markets are soaring as banks and traditional financial stocks are hit by investors dealing with the collapse of several large banking institutions.
As a new trading week begins, bank stocks are proving to be the biggest losers, with some of them seeing losses of up to 75% within hours of opening.
A look at Yahoo Finance’s biggest losers list shows a long list of bank stocks that are bleeding badly.
Following the recent closure of Silicon Valley Bank, Silvergate Bank and Signature Bank, fears of a spreading bank contagion have rocked the sector as investors look to see who might be next on the chopping block. As of this writing, First Republic Bank (FRC) and Western Alliance (WAL) are taking the brunt of the market turmoil, both down about 60%.
Bitcoin (BTC) bullish and head of ARK Invest Cathie Wood warns that if the Federal Reserve does not pivot on interest rates, more banks will be destroyed.
“If the Fed continues to focus on lagging indicators like the CPI, and does not pivot in response to the deflationary forces telegraphed by the inverted yield curve, then this crisis will gobble up more regional banks and further centralize, if not nationalize, US banking. system.
As a result, [ARK Invest is] It comes as no surprise to me that BTC and ETH appreciated as shares of US regional banks imploded. Their blockchains are decentralized, transparent, and auditable. Banks are not and, in recent days, they have become fewer.
BitMEX founder and cryptocurrency veteran Arthur Hayes also expects the Federal Reserve to go dovish again and print more money, presumably boosting risky assets like cryptocurrencies.
That’s a… wild move in the 2 year old. In case you think this is something other than what it is. The bond market is saying that it is back in money printing mode. Don’t fight the Federal Reserve!”
Banking giant Goldman Sachs has reportedly predicted that due to the crisis, the Fed will pause rate hikes this month rather than go ahead with the previously expected 25 basis point hike.
Says Goldman economist Jan Hatzius,
“In light of the stress in the banking system, we no longer expect the FOMC to raise rates at its next meeting on March 22.”
With the banking woes that plagued cryptocurrencies of late no longer taking center stage, the Bitcoin, Ethereum (ETH) and altcoin markets are bouncing back strongly.
At the time of writing, Bitcoin is trading at $24,220, up 20% in the last 24 hours, while ETH is priced at $1,685, up 15% in the last 24 hours.
Altcoins are also sweeping, with many well over 30% in the last day.
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