US Banking Crisis: PacWest Bank On The Brink Of Collapse As Bitcoin Steals The Spotlight

Published by

Qadir AK

May 4, 2023

PacWest Bancorp, a California-based American bank, recently confirmed that it is considering various strategic options, including a potential sale, as its shares continue to tumble. Amid this turmoil, the rise in Bitcoin’s value has caught the attention of market observers, prompting speculation that a significant rally could be on the horizon.

PacWest’s Struggle for Stability

PacWest has disclosed that it has been approached by potential partners and investors while seeking ways to secure its financial future. The bank’s shares dropped by 50% in after-hours trading on Wednesday, leading it to explore all possible avenues to maximize shareholder value.

Sources familiar with the matter revealed that the bank had enlisted boutique investment bank Piper Sandler to help explore strategic options, including a potential sale. However, no formal sale process has been initiated, and PacWest is also considering raising new capital.

The U.S. regional banking sector’s turmoil intensified when Canada’s TD Bank announced that it would abandon its planned $13 billion acquisition of Memphis-based First Horizon. The two banks cited uncertainty surrounding regulatory approval of the deal as the reason for this decision.

Bitcoin Rally on the Horizon?

As traditional banks face increasing difficulties, the Bitcoin price has been steadily rising, with some experts predicting it could reach $35,000. Federal Reserve Chair Jerome Powell has hinted at a possible pivot, while JPMorgan analysts anticipate rate cuts starting in the next quarter. Bitcoin was trading at $29,399 at the time of writing this article, having gone up by over 3% in the past twenty-four hours.

The ongoing instability in the U.S. banking sector could be a driving factor behind a potential Bitcoin rally. With banks struggling, investors may seek alternative forms of investment, such as cryptocurrencies, to protect their wealth. This shift in investor preference could drive demand for Bitcoin, pushing its price higher.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.