BitMEX founder Arthur Hayes says Bitcoin (BTC) price is driven by the recent US banking crisis, while calling First Republic a “dead bank walking.”
In a new thread, Hayes say that the banking crisis will not 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 yet. Until the Fed cuts short-term rates below, I believe, 2% and steepens the yield curve, we’re going to see bank after bank bite the dust and savers playing deposit roulette over whether or not [US Treasury Secretary Janet] Yellen rescues them.
This uncertainty is driving money outside of gold and BTC higher.”
According to Hayes, First Republic is on its way verge of collapse and it would be surprising to see how it makes it through the weekend without being seized by the Federal Deposit Insurance Corporation (FDIC).
“If this bank bites the dust, probably later this week, we will be closer to the market and realize that the entire U.S. bank deposit base is de facto [guaranteed] By the [government]. Massively inflationary, which is why XAU (gold-backed token) and BTC are rising [the] news that [First Republic] is a dead bank walking.”
Earlier this week, shares of First Republic fell more than 50% as customers raised more than $100 billion from the bank, exacerbating the 2023 US banking crisis. It was recently announced that the US government will not intervene to rescue the ailing bank.
Bitcoin is trading at $29,106 at the time of writing, down 2.4% in the past 24 hours, but up 7% from its seven-day low of $27,243.
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