Shares of US bank NYCB fall 20%: How does this relate to BTC?
Shares of US bank NYCB fall 20%: How does this relate to BTC?
Shares of New York Community Bank (NYCB) fell 21.71% in extended trading on Thursday, reaching their lowest price since 1997.
As a reminder, NYCB bought Signature Bank, whose high-profile collapse in March 2023 triggered a banking crisis that threatened to take on global proportions. US federal regulators shut down Signature Bank, raising concerns about systemic risk. However, many experts blamed cryptocurrency for its fall.
New York Community Bank reported the reasons for the stock's decline: "The weakness is due to loan reviews resulting from ineffective oversight and risk assessment."
NYCB has been under pressure in recent months due to concerns about its exposure to commercial real estate. The bank also restated its fourth-quarter earnings report, announced management changes, and disclosed problems with its internal controls. In addition, Moody's downgraded the bank's credit rating to negative in February.
Amid NYCB's stock decline, the major cryptocurrency, Bitcoin, is trading near an all-time high. Members of the crypto community and market analysts are assessing how these events are related.
As BeInCrypto reports, Signature Bank was linked to cryptocurrency assets, so there were opinions that it was cryptocurrency that triggered the crisis and the closure of the bank, but NYDFS Superintendent Adrienne Harris officially stated that cryptocurrency was not the reason for the closure.
The Federal Deposit Insurance Corporation (FDIC) commented that Signature Bank had $4 billion in deposits focused on cryptocurrency assets.
Adrienne Harris explained the reasons for the bank's closure. According to her, Signature had a high percentage of uninsured deposits and a lack of liquidity controls to meet withdrawal requests. Therefore, the failure of Signature Bank is attributed to ineffective oversight and risk assessment.
NYCB was not the only US bank to see its stock price decline in the past month. Valley National Bank shares are down 25%, Metropolitan Bank is down 15%, HarborOne has lost 14%, and Comerica Bank shares are down 13%.
This comes at the same time as the spectacular success of cryptocurrencies and Bitcoin in particular. Bitcoin is seen as a safe-haven asset in a difficult economic environment with high inflation and geopolitical risks. Most investors try to include at least 30% of cryptocurrency assets in their portfolio to diversify risk.
At the time of writing, the value of Bitcoin was $61,811. The growth for the week exceeded 21%, but at the moment the asset is consolidating, having retreated by 3% from the achieved figures.
Related: Outflow of funds from GBTC led to a decline in Bitcoin price
