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According to the FDIC, thirty-two branches of Republic First Bank across the United States will restart their operations under Fulton Bank starting next week.
The regulators in the United States have closed Republic First Bank, based in Philadelphia, marking the first banking failure of 2024. This failure has sparked debate within the crypto community about promoting Bitcoin, Ether, and other altcoins, which have been severely affected by the news.
CEO of Zesh Marius Martocsan shared an X post on April 26, stating, “Another bank just collapsed, the Republic First Bank. Yeah… I think I’ll stick to Bitcoin.”
On April 26, another X (formerly Twitter) user and a crypto commentator, Randi Hipper, asked her 87,100 X followers how many more banks will fail before people start being their bank.
FDIC Seizes Operations Of Republic First Bank
On April 26, Federal Deposit Insurance was appointed receiver after the Pennsylvania Department of Banking and Securities seized its operations. According to an FDIC statement published on April 26, the insurance agency will take on nearly all deposits and acquire Republic Bank’s assets.
Per the balance sheet reported on January 31, 2024, Republic First Bank had approximately $6 Billion in total assets and $4 Billion in total deposits.
Moreover, the thirty-two branches of the bank were spread across New Jersey, Pennsylvania, and New York. These branches will restart their operations under the banking umbrella of Fulton Bank. The operations will begin at the latest by the start of next week.
Here’s How Cryptos Reacted To Republic’s Failure
In early 2023, rumors of banking failures led to a significant increase in the price of Bitcoin in a short period. However, when the news confirmed that multiple banks failed, BTC took a sharp hit.
Reports of the Republic’s First’s collapse hurt Bitcoin, which went down 1.16% to $62,715. However, the trades regained momentum and were trading at around $62,958 (at the time of writing), 2.20% down from the previous day.
Ether is also down by approximately 0.85% from the previous day and is currently trading at $3,115.60.
Around the same time, altcoins have also experienced a slightly higher decline in the same timeframe. Dogecoin has declined by 4.17%, trading at $0.1449. Solana has also decreased by 5.63%, trading at $136.15.
How The US Banking Industry Reacted
It’s a rough year for the industry. Republic First Bank’s failure is an eerie reminder of the early 2023 market downturn. The FDIC dealt with five banking failures in last year’s scare.
The failure of so many banks will substantially affect the country’s banking industry and the overall economy. Such shortcomings will also dampen customers’ trust in the country’s banking system.
In March 2023, the Federal Reserve announced the closure of Signature Bank to protect the U.S. economy and avoid systemic risk. The announcement came just a few days after the closing of Silicon Valley Bank. A week before that, another famous crypto-friendly bank, Silvergate Bank, announced that it would stop its operations and process voluntary liquidation.
Notably, First Republic Bank, a separate legal entity from Republic First, was acquired by an investment banking firm and a conglomerate, JPMorgan, in May 2023. It was acquired after the failure of initial recovery efforts.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
