New York Community Bank, which acquired the majority of assets of the failed bank Signature Bank last year, reported a surprising loss of $252 million in the fourth quarter of last year. This news has caused panic in the market and raised concerns about a regional banking crisis in the United States. While Federal Reserve Chairman Jerome Powell recently emphasized that the problem is under control, Arthur Hayes, co-founder of BitMEX, expressed skepticism about Powell’s statement and asserted that the Federal Reserve will soon intervene to rescue the market, prompting Bitcoin to rise to $1 million.
New York Community Bank’s stock price has plummeted nearly 50% in the past week as a result of the loss, dragging down the KBW Nasdaq Bank Index by almost 4% in the past week. The overall decline in regional bank stocks has raised concerns about a banking crisis.
Market analysis suggests that the deterioration of the US commercial real estate market is the main reason for the bank’s loss in the last quarter. The bank increased its provision for bad loans from $62 million to $552 million in response to the risk of bad loans from commercial and real estate loans, which was ten times higher than analysts’ expectations.
Despite the bank’s senior management attempting to explain this move as a result of surpassing $100 billion in assets and facing stricter liquidity requirements, investors remained unsettled and sold their stocks.
However, Federal Reserve Chairman Jerome Powell remains optimistic about the risk of a banking crisis. In a recent interview with CBS’s “60 Minutes,” he stated that more small banks may fail or merge due to bad loans from commercial real estate, but ultimately, the problem is manageable. Powell believes that a situation similar to the 2008 financial crisis, which led to the collapse of some of the largest Wall Street institutions and hundreds of banks across the United States, is unlikely to happen again.
Arthur Hayes, co-founder of BitMEX, strongly disagrees with Powell’s remarks. In a tweet today, Hayes stated that he had previously predicted that the banking system’s problems have not been resolved and that the financial crisis in banks may prompt the Federal Reserve and the Treasury Department to quickly introduce financial rescue measures. He expects that Bitcoin’s price will rise, similar to the price trend in March 2023.
During last year’s banking crisis in the United States, the Federal Reserve and the Treasury Department swiftly implemented relief measures, which brought confidence to investors. Meanwhile, Bitcoin’s decentralized nature contrasted with the vulnerability of traditional banks, and the cryptocurrency surged 23% from $19,549 to over $29,000 in March of last year.
For more information, read:
New York Community Bank Reports a Loss of $252 Million: Arthur Hayes Predicts Bitcoin May Repeat the “Fall and Rise” Trend of March Last Year.
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