• Three major U.S. banks, Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank (SNBY) have recently collapsed resulting in financial contagion for other lenders.
• Eleven banks have provided a $30 billion bailout to First Republic bank in order to prevent its collapse and restore trust in the banking system.
• The FDIC, Treasury, and Federal Reserve have been providing bailouts to various banks due to the recent bank failures.
Recent Collapse of Three Major U.S Banks
The recent collapse of three major U.S banks – Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank (SNBY) has caused financial contagion for other lenders across the country. Depositors removed approximately $8.8 billion from Charles Schwab Corporation’s prime money market funds due to the instability in the banking industry which is why eleven lenders had to step in and provide a $30 billion bailout to First Republic bank in order to avoid its collapse and restore trust in the banking system.
Bailouts From FDIC, Treasury, and Federal Reserve
The Federal Deposit Insurance Corporation (FDIC), Treasury Department, and Federal Reserve have been providing bailouts to various banks due to the recent bank failures which included Credit Suisse receiving a 50 billion Swiss franc bailout from the Swiss National Bank following the bailout of SVB and SNBY depositors by the US central bank, Treasury Department, and FDIC.
Impact on First Republic Bank (FRC)
First Republic Bank (NYSE: FRC) experienced a tumultuous week with its stock value declining by 50.41% against the U.S dollar over five days as it explored various options such as selling assets off for liquidation but was still at risk of failure until eleven banks stepped forward with their collective $30 billion deposits into FRC’s coffers thus saving it from possible collapse on Thursday 16th March 2023 before markets closed where its shares ended up 9.98% higher than when it opened that day per share gaining back $3.11 each share since August 1986 when they were initially valued at only $10 each per share before today’s events occurred.
Eleven Banks Who Bailed Out FRC
The eleven lenders who collectively provided a bailout of thirty billion dollars towards FRC included giants such as Bank of America, Citigroup, JPMorgan Chase, Wells Fargo Goldman Sachs’s Morgan Stanley‘ BNY Mellon’s PNC Bank State Street Truist Bank & US Banks who all issued an official statement addressing funding that mentioned after government receiverships of SVB & SNBY “a few banks experienced uninsured deposit outflows „and “the actions of these largest banks show their trust towards our country’s banking system“.
The recent fall of three major US Banks has caused turbulence throughout our banking institution which has impacted both domestic & international markets leading many financial institutions such as Credit Suisse & First Republic Banks being bailed out by government officials including those from FDIC ,Treasury department & Federal Reserves however despite this chaos Eleven Lenders stepped up providing thirty Billion Dollars towards FRC restoring faith within our banking system & securing liquidity .
• The Central Bank of Bolivia has decided to sell dollars directly to citizens in order to counter what it is calling a „speculative attack“ on the national monetary system.
• This decision came as a result of increased fear that the country may experience devaluation due to its decreasing foreign reserves.
• The Central Bank reported having $372 million in foreign currency reserves as of February 8th, 2021.
Central Bank of Bolivia Selling Dollars Directly to Citizens
The Central Bank of Bolivia has announced that it will start selling dollars directly to citizens in an effort to curb the rising demand for foreign currency caused by fears of devaluation and inflation. Edwin Rojas, president of the Central Bank, stated that this measure is being taken through Banco Unión in order to meet the population’s demand for dollars.
Fears of Devaluation
The increasing demand for dollars has been triggered by several factors which have led people to believe there might be a devaluation move coming. In Bolivia, there is a fixed exchange rate set back in 2011 which establishes each dollar is valued at 6.86 bolivians, the local fiat currency. Countries like Venezuela and Argentina which had established exchange controls on foreign currency have experienced heightened levels of devaluation and inflation due these restrictions.
On March 9th, President Rojas gave an update on how the market was reacting to this measure noting that more than $91 million was allocated during the last two weeks alone in order to satisfy unprecedented demand from citizens looking for dollars outside traditional markets. He also clarified that there are no plans currently for changing their monetary policy despite warnings from analysts about potential long-term issues with sustainability measures such as this one.
Foreign Currency Reserves
According to reports from February 8th, 2021, the nation’s foreign currency reserves totaled $372 million; however Antonio Saravia -a local economist- estimates that around $400 million would be needed in order for stability with regards to potential future changes in exchange rates or other economic fluctuations within the country.
In conclusion, while extraordinary measures such as direct dollar sales from government institutions may provide temporary relief from current worries related with devaluation; it remains unclear if these actions will provide any long term solutions without further policy reforms or changes being enacted by Bolivian authorities moving forward.
• Galaxy Digital Research Team published a report predicting that the market size of Bitcoin-based non-fungible tokens (NFTs) could reach $4.5 billion by 2025
• The report explores potential use cases for Bitcoin-based Ordinal inscriptions and NFTs, such as new types of decentralized software or Bitcoin scaling techniques
• Infrastructure for the technology is developing quickly with wallets being one of the key building blocks
Galaxy Digital Report Predicts Big Growth for Bitcoin NFT Market
Galaxy Digital’s research team has released a report predicting that the market size of non-fungible tokens (NFTs) built on Bitcoin could reach $4.5 billion by 2025. As of writing, there are more than 288,000 Ordinal inscriptions hosted on the Bitcoin blockchain, signaling growth in adoption.
Potential Use Cases Explored
The Galaxy researchers explore various potential use cases stemming from this trend, such as new types of decentralized software or Bitcoin scaling techniques. Moreover, the study delves into the various collections minted in recent times, such as Taproot Wizards, Bitcoin Punks and Ord Rocks. Openordex is also mentioned as it leverages partially-signed bitcoin transactions (PSBTs) to enable trustless listing and purchasing of inscriptions.
Controversy Surrounding Ordinal Inscriptions
The paper also touches upon controversy tied to these Ordinal inscriptions but ultimately concludes that technical arguments are avoided and a social movement to stop them probably won’t happen.
Key Building Blocks For Technology Emerge
Infrastructure for this technology is emerging quickly with wallets being one of the key building blocks according to Galaxy’s paper on the inscription subject.
Overall,the researchers think that new use cases stemming from this trend will drive growing interest and adoption for bitcoin which could lead to its market size reaching $4.5 billion by 2025.