Over the past week in the US, 'First Republic Bank' has emerged as the number one related query for users searching for 'BITCOIN.' BTC has recently experienced volatility which has coincided with key events related to bank stability in the US. For example, on March 10, the day that Silicon Valley Bank was taken over by regulators, BTC sold-off on Friday, trading as low as USD 19,500 over the weekend. However, by Tuesday morning, the token led a broad crypto rally, adding USD ~76B to its market cap, and reaching USD 26,500.
Silicon Valley Bank’s collapse also coincided with the takeover of Signature Bank, further straining the ability to withdraw fiat from BTC. In March, some argued that the rally represented a flight to BTC at a moment when withdrawing fiat from the crypto space was strained. Others speculated that BTC is rallying due to readjusted expectations over Fed rate hikes and other monetary policy considerations. Similarly to March, BTC’s performance over the past 24 hours has invited speculation about the cause.
This narrative highlights multiple BTC core selling points:
- Bitcoin acts as a hedge on inflation
- Sound monetary policies
- Eliminates counterparty risk via self-custody
For BTC’s most ardent supporters, banking crises resonate considering the first block on the network was mined with the inscription 'The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.'
Yesterday also saw unsubstantiated rumors about the selling of Mt. Gox and US government held BTC: At 4 PM yesterday, ‘db,’ a Twitter account focused on crypto news tweeted ‘Mt Gox and US Govt Wallets Making Transactions: Arkham Alert.’ In a subsequent tweet db cited crypto research firm Arkham as having erroneously alerted ‘a small subset of users’ that wallets associated with Mt. Gox and the US government had shown outflows.
Publicly available information suggests that the US owns BTC 205,000, worth USD 5.94B, from various seizures. The US government regularly sells such BTC. For instance, court filings from March showed the government had begun to liquidate some BTC associated with Silk Road seizures. The Japanese trustee of Mt. Gox holds BTC ~142,000, worth USD 4.12B. These tokens are scheduled to be returned to creditors in October.
Last month, Bloomberg reported that the largest Mt. Gox creditor ‘intends to hold rather than sell the [BTC] that’s due to be disbursed to it this year.’ Google search data shows that 'First Republic Bank' is followed by 'Mt. Gox' as the second most common query for users searching for 'bitcoin' in the US.
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