Bitcoin enthusiasts are rekindling dreams of a $1 million price target as New York Community Bancorp’s stock plunges amid fears of a looming banking crisis.
Arthur Hayes, former BitMEX CEO, reiterates his bullish forecast amidst concerns over regional bank stability and macroeconomic triggers.
Bitcoin (BTC) million-dollar price tags are back on the table as the United States regional banking sector faces potential crisis once again. Almost a year after several banks, including crypto-focused Signature Bank, collapsed, its buyer is now down 60% year-to-date, sparking concerns within the cryptocurrency community.
In a déjà vu moment, Bitcoin enthusiasts are witnessing what some fear could be the beginning of a second U.S. banking crisis. New York Community Bancorp (NYCB), the bank that acquired Signature Bank last year, has seen its stock value plummet by 30% in just five days, hitting levels reminiscent of the 1990s.
NYCB’s decline has raised alarms, especially considering its role in the acquisition of a failed crypto bank just a year ago. Benjamin Cowen, CEO and founder of the crypto newsletter Into The Cryptoverse, pointed out the bank’s valuation harking back to 1997, highlighting concerns about investor protection.
The question arises: Did the regional bank crisis ever truly end? With the Federal Reserve’s emergency loan program for regional banks set to end in a month, concerns loom large. Regional banks still hold a significant portion of outstanding commercial real estate (CRE) debt, potentially setting the stage for a repeat of the turmoil seen in March 2023.
The real question is did the regional bank crisis ever really end?
In roughly one month, the Fed’s emergency loan program for regional banks will end.
All while these banks hold 70% of outstanding CRE debt.
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— The Kobeissi Letter (@KobeissiLetter) February 6, 2024
Arthur Hayes, former CEO of crypto derivatives giant BitMEX, believes that the end of the loan program could lead to a similar scenario, driving Bitcoin prices. Hayes, who had previously forecasted a $1-million BTC price, reiterates his prediction, citing NYCB’s losses and Moody’s downgrade of its status to junk.
“From junk to bankrupt, that’s the future. And then more money printer go brrrr,” Hayes remarked, emphasizing the potential for further economic instability. Notably, instability isn’t confined to the U.S., with China’s CSI 1000 index losing $7 trillion since Q4 last year, hinting at broader macroeconomic concerns.
Despite these potential triggers, Bitcoin has remained within a defined daily range for over 150 days. The launch of U.S. spot exchange-traded funds (ETFs) has yet to significantly impact BTC price, suggesting that the cryptocurrency market may be awaiting further developments before making significant moves.
As Bitcoin bulls dare to dream of a $1-million price target, the future remains uncertain. With economic turbulence brewing both domestically and internationally, the cryptocurrency market stands at a pivotal juncture, poised to react to unfolding events with characteristic volatility.
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