Another US Bank Plummets as Bitcoin Continues To Gain Ground
After reportedly experiencing internal control issues, New York Community Bank (NYCB) stock has plunged over 20%, hitting its lowest point in 27 years.
Amid NYCB stock decline, Bitcoin approaches its previous all-time highs.
NYCB Declines, Bitcoin RisesThe Kobeissi Letter reported that New York Community Bank is facing its lowest stock price since 1997.
“The weakness is reportedly related to loan review resulting from ineffective oversight and risk assessment.”
NYCB previously acquired Signature Bank, which collapsed during the regional banking crisis in March 2023.
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While many assumed that crypto was the cause due to its pro-crypto stance, the bank confirmed that it was not the case. In April 2023, NYDFS Superintendent Adrienne Harris confirmed that crypto was not the cause of the closure.
New York Community Bancorp, Inc (NYCB) Stock Graph. Source: The Kobeissi Letter
Federal regulators closed Signature Bank, citing concerns about systemic risks. However, mainstream media blamed crypto for its downfall. Harris described the events leading to the failure as:
“A new-fashioned bank run.”
Banking Sector DownturnShe said Signature had a high percentage of uninsured deposits and lacked liquidity management protocols to meet withdrawal requests.
According to the Federal Deposit Insurance Corp (FDIC), Signature Bank had around $4 billion of deposits related to its crypto asset banking business.
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NYCB wasn’t the only US regional bank to have its share price affected in recent times.
On February 7, the Kobeissi Letter reported that Valley National Bank was down 25%, Metropolitan Bank had lost 15%, HarborOne dropped 14%, and Comerica Bank had sunk 13% so far this year.
On the other hand, major investment bank Morgan Stanley expects the US to experience a recession in the near future.
Meanwhile, as the share price plummets, Bitcoin approaches its 2021 all-time high price of $65,000 USD. At the time of publication, Bitcoin’s price is $61,493.
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