As the global bank crisis spreads, Credit Suisse Group AG, a Switzerland-based global investment bank and financial services firm, seems to have been caught in the contagion, which could lead to more gains for Bitcoin and the crypto market. The bank’s shares CS dropped by nearly 25% over the week.
This plummet comes after the bank’s largest shareholder Saudi National Bank (SNB), reportedly disclosed that it could not provide further support for Credit Suisse. According to Reuters, citing an SNB statement, the bank stated it would “no longer buy more shares in the Swiss bank on regulatory grounds.”
Another Share Drop, Another Bank Run?
Saudi National Bank’s latest withdrawal of support to the struggling Credit Suisse has raised several speculations on whether this could eventually lead to the downfall of the struggling bank. SNB currently holds a large stake in Credit Suisse of up to 9.88%. SNB chairman Ammar Al Khudairy told Reuters the bank could not go further than 10% due to regulatory concerns.
After the announcement, Credit Suisse shares plummeted 24% on Wednesday, March 15. Credit Suisse shares have since been on a downtrend following the collapse of Silicon Valley Bank; its recent plummet due to SNB support withdrawal has made it hit a new record low with a value of $2.10 at the time of writing.
As of last year, after its 10% stock acquisition, SNB committed a $1.5 billion investment in Credit Suisse. The struggling bank’s latest major dump came just months after publishing its 2022 annual report, resulting in a massive withdrawal of funds from the financial institution.
While the company has continued to seek financial assistance after seeing a decline in customer activity, experts have suggested the bank could eventually fall, given the recent collapse of three major banks in the United States in the past week.
Is Bitcoin Gearing For Another Rally?
With the previous Bitcoin (BTC) rally attributed to the collapse of prominent banks, speculations have been raised around the crypto community on whether another significant bank fall, such as Credit Suisse, could again lead to the cryptocurrency extending its bullish trend.
Over the past week, since the fall of three major US banks Silvergate, Signature bank, and Silicon Valley, many investors in the financial sector have sought an alternative way as a store of value. So far, crypto assets such as Bitcoin have shown to be the best option. The latter has been reflected in their prices.
This has made Bitcoin and the rest of the market go into a bullish period over a short period. Furthermore, the BTC price chart indicates another potential upcoming surge after the previous rally.
Recent events hint at bad news for the global economy, but the crypto market and Bitcoin, in particular, have benefited. The continuous downfall of banks could gear BTC and the rest of the crypto market for another spike as the store of value narrative re-gains momentum as an appealing alternative to the fiat system.
Featured image from Unsplash, Chart from TradingView.