Multiple Bank Stocks Slide While Bitcoin Pumps After First Republic Failure

Another wave of banking concerns swept the markets on Tuesday as shares of PacWest, Western Alliance and other financial institutions fell more than 20% on the day.

This comes shortly after California financial regulators took control of First Republic Bank on Monday, as it will reopen 84 branches under the oversight of JP Morgan Chase.

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California-based PacWest Bancorp (PACW) has seen its stock price go from $8.90 at 9:30 a.m. ET Monday to just $5.50 by 11:10 a.m. It has since recovered slightly to $6.15 at time of writing, which is a daily decline of 27%.

Meanwhile, Arizona-based Western Alliance Bancorporation (WAL) is down a similar 20.53% on the day, from $36.18 to $28.96. Other banks including Zions (ZION) and Comerica (CMA) posted losses of nearly 10%.

Each represents some of the largest daily losses these banks have incurred since mid-March, in the wake of the March 10-12 collapse of Silicon Valley Bank and Signature Bank. collapsed It was a whopping 76% at the time, while the PacWest is down 47%, and has only been feeling a bit of a pick-me-up since then.

Of the three, First Republic lost the largest share of its deposits in the first quarter, at 41%. PacWest and Western Alliance each lost 17% and 11% of deposits, respectively, as clients sought the perceived safety of larger banks or higher returns within money market funds.

Treasury Secretary Janet Yellen previously gave Mixed signals On whether her management and the Federal Reserve would agree to support deposits at smaller banks, as they did with Silicon Valley Bank in March. It has previously indicated that the government will only support banks that are believed to present “systemic risks” to the banking system, prompting Cash This could invite depositors to flee from small banks to large, privileged and protected companies.

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In response to the falling stock prices, BitMEX founder Arthur Hayes and expect That PacWest would be the next bank to collapse and go into receivership under the FDIC. Hayes became even more bullish on Bitcoin when the Silicon Valley bank collapsed in March, sending the asset soaring from $20,000 to $28,000 at the time.

Backwest Bancorp $PACW It may be next on the chopping block for bank failures. Big down again today.

We are just waiting for Jim Cramer to tell us that he is a strong bank in order to confirm that the FDIC can act. pic.twitter.com/84aiOKKPB5

– WallStreetSilv (@WallStreetSilv) May 2, 2023

Similarly, Bitcoin saw a modest pumping on Tuesday from $28,000 to $28,566.