Share prices of several regional US banks tumbled in trading late on May 3.or, despite the fact that Federal Reserve Chairman Jerome Powell had called the banking sector “solid” and “resilient” just hours earlier.
One of these regional banks, PacWest Bancorp, fell a whopping 52.5% in trading after Bloomberg reported the bank would explore strategic options on May 4. Some see it as another bank that could fail amid the US banking crisis.
According to Bloomberg, citing people familiar with the matter, the bank is considering the sale or capital increase.
For his part, Western Alliance Bancorp (22.4%), Metropolitan Bank (16.2%) and HomeStreet (7.8%) were among the other regional banks hardest hit.
Metropolitan Bank once offered services to cryptocurrency companies, but closed its digital assets division in January because he was not satisfied with the way the cryptocurrency sector was developing.
Western Alliance Bancorp also integrated blockchain-based payment solutions for its client base of the firm’s blockchain division and digital assets.
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
Cryptocurrencies gain momentum as shares of US regional banks fall 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, $KEY: ⬇️8%Looks like it’s time to hold
Powell’s attempt to assuage concerns about the banking sector came as he announced that the Federal Reserve would raise interest rates another 25 basis points:
“Conditions in the sector [bancario] they have vastly improved since early March and the US banking system is strong and resilient. We will continue to monitor conditions in the sector.”
Powell added that the Fed was “committed to learning the right lessons from this episode.”and we will work to prevent events like these from happening again.”
The First Republic Bank failure was the second largest bank failure in recent memory.. The problems first arose on April 26, when news of a government default broke, causing the bank’s share price to plunge 20% within hours.
Several Crypto Twitter users have mocked Powell for claiming that banking sector conditions “have vastly improved” since early March..
Will Clementefounder of digital asset analysis firm Reflexivity Research, tweeted to his 680,300 Twitter followers that the collapse of five banks – SVB, Silvergate, Signature, First Republic and PacWest – “sounds like a very strong and resilient banking system…”
FED Chair Jerome Powell says “banking system is sound, resilient.”
*two hours later* : PacWest, Western Alliance, and Metropolitan bank down a combined +100%$PACW $WAL $MCB pic.twitter.com/YBPk0LtYVh
— Mohegan ₿TC (@MoheganBTC) May 3, 2023
Fed Chairman Jerome Powell says “the banking system is strong and resilient.”
*two hours later* : PacWest, Western Alliance, and Metropolitan Bank down a combined +100%$PACW $WAL $MCB pic.twitter.com/YBPk0LtYVh
Twitter user Zerohedge taunted Powell pointing out to his 1.6 million followers that more than USD 500,000 million have disappeared in the last month alone due to “bank failures”.
PacWest Bancorp’s 52% drop will wipe out about $340 million of its market capitalizationwhich was $772 million as of the close on May 3, according to Google Finance.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.