2 American Banks in Turmoil: Is Another Banking Crisis Starting?

• Shares of PacWest and Western Alliance banks have plummeted.
• Many US banks are experiencing a decline in their shares.
• PacWest Bancorp is also said to be at risk of bankruptcy.

The sharp decline in US bank shares today has raised concerns; BTC price continues to rise, benefiting from this failure.

Failure in US Banks is Growing!

Shares of PacWest Bancorp (PACW), based in California, fell from $8.92 to $5.26 today. Since then, it has slightly recovered to $6.68 at the time of writing, representing a net daily decline of 26%. PACW shares also experienced a decline of more than 10% on Monday. PacWest shares were trading just above $23 at the beginning of 2023.

Meanwhile, Western Alliance Bancorporation (WAL), based in Arizona, also experienced a similar 16% decline to $26.54 from $36.18 during the day. WAL shares had also declined by 1.8% on Monday. Other banks, including Zions (ZION) and Comerica (CMA), experienced roughly a 10% loss.

Each represents some of the largest daily losses for such banks since mid-March, following the bankruptcies of Silicon Valley Bank and Signature Bank on March 10 and 12, respectively.

Among the three, First Republic Bank lost the largest share of its deposits in the first quarter, with a 41% decline. PacWest and Western Alliance lost 17% and 11% of their deposits, respectively, as customers sought the perceived security of larger banks or higher returns in money market funds.

Treasury Secretary Janet Yellen had previously given mixed signals about whether her department and the Federal Reserve would agree to stop deposits in smaller banks, as they did with Silicon Valley Bank in March. Previously, she had stated that the government would only support banks that were considered a “systemic risk” to the banking system, which led to criticism that this could encourage depositors to flee smaller banks for larger, privileged and protected companies.

Crypto is Benefiting from Bank Failures

Arthur Hayes, co-founder of BitMEX, predicted that PacWest would go bankrupt and become the next bank to be liquidated under the Federal Deposit Insurance Corporation in response to falling stock prices.

Hayes said that Bitcoin experienced an extra surge when Silicon Valley Bank collapsed in March, causing the asset to rise from $20,000 to $28,000.

Similarly, Bitcoin experienced a modest rise from $28,000 to $28,566 today. The Bitcoin price is currently trading above $28,700.