A massive bank is now on the brink as fears about the safety of the modern banking system spread around the world.
Credit Suisse shares have plummeted 25% in the last 24 hours amid revelations that its largest shareholder, Saudi National Bank, has decided it will “absolutely not” prop up the troubled bank and inject more capital.
Credit Suisse shares tumbled so far and so fast that it triggered an automatic trading pause on the Swiss market, reports UPI.
The sharp drop follows revelations that the bank’s customers began pulling out cash in significantly higher amounts late last year.
The bank also expects its earnings to take a major hit after one of its clients defaulted on margin calls.
The news follows the federal shutdown of two large regional banks in the US – Silicon Valley Bank and Signature Bank.
Amid those shutdowns, the Biden Administration promised all depositors would be made whole and announced the creation of a new facility designed to lend money to banks in need of more capital to stay afloat.
The banking crisis has fueled a rapid rise in the price of Bitcoin (BTC), which was created anonymously after the 2008 financial crisis as an alternative to the banking system.
And the narrative that Bitcoin offers an antidote to traditional banking appears to be taking hold, according to Google Trends.
Worldwide searches for the term “Bitcoin bank” have exploded in the last week, as the price of BTC jumped from a low of $19,662 on Friday to a high of $26,111 on Tuesday.
Bitcoin enables direct, instant and practically free peer-to-peer transfers around the world in the form of the digital asset BTC.
Its code-based monetary system is unable to ask for or require a bailout, and instead relies on individuals around the world who power the network and back BTC with their own capital.
After reaching that yearly high, BTC has retraced to $24,260 at time of publishing, down 6.6% in the last 24 hours.
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