BitMEX founder Arthur Hayes says that the price of Bitcoin (BTC) is being driven by the recent US banking crisis while calling First Republic a “dead bank walking.”
In a new thread, Hayes says that the banking crisis won’t end until the Federal Reserve cuts short-term interest rates, adding that the uncertainty of the Fed’s actions is driving up the price of both gold and the king crypto.
“The US banking crisis is not over. Until the Fed cuts short-term rates below, I believe, 2% and steepens the yield curve, we will see bank after bank bite the dust and depositors will play deposit roulette on whether or not [US Treasury Secretary Janet] Yellen bails them out.
This uncertainty is what is driving outside money like gold and BTC higher.”
According to Hayes, First Republic is on the verge of collapse and it would be surprising to see it make it to the weekend without being seized by the Federal Deposit Insurance Corporation (FDIC).
“When this bank bites the dust, probably later this week, we will be closer to the market realizing the entire US banking deposit base is de-facto [guaranteed] by the [government]. Massively Inflationary, that is why XAU (gold-backed token) and BTC are rising on [the] news, that [First Republic] is a dead bank walking.”
Earlier this week, shares of First Republic fell by over 50% as customers withdrew over hundred billion dollars from the bank, deepening the 2023 US banking crisis. Recently, it was announced that the US government will not step in to save the troubled bank.
Bitcoin is trading for $29,106 at time of writing, a 2.4% dip during the last 24 hours but a 7% gain from its seven-day low of $27,243.
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