Even though Federal Reserve Chairman Jerome Powell had just labeled the US banking system as “sound” and “resilient,” the announcement of OneWest Bank exploring strategic options raised concerns. Insiders cited by Bloomberg suggest the exploration is due to discontent with the trajectory of the cryptocurrency industry. Other regional banks like Zions Bancorp and Cathay General Bancorp have seen notable declines, with share prices down by 11.5% and 17.1%, respectively. In contrast, Fidelity has indicated its commitment to serve its clientele through its blockchain and digital asset department.
Powell’s declaration of the banking sector’s stability coincided with his recognition of past catastrophes, and his acknowledgment that the Fed is dedicated to learning from them. Despite this, there have been notable bank failures, marking the second-largest in recent history. Its shares nosedived 20% within hours of the government receivership announcement on April 26th. Crypto Twitter users mocked Powell for claiming the banking sector had generally improved since early March. Will Clemente of Reflexivity Research noted five banks that had experienced failure, including First Republic, PacWest, City National, OneWest, and East West.
Former Coinbase CTO Balaji Srinivasan recently made good on his $1 million bet, donating $1.5 million as a “costly signal” to the community that “there’s something wrong with the economy.”
