Bitcoin to ‘Take Another Leg Up’ as Trillions Could Potentially Go to First Republic Bank Bailout: Arthur Hayes

BitMEX co-founder and crypto veteran Arthur Hayes predicts Bitcoin (BTC) will rally amid recent US banking woes.

Hayes is telling his 376,200 Twitter followers that he believes the current uncertainty surrounding the First Republic Bank (FRC) will likely prompt the Federal Reserve to inject more liquidity into the market, boosting risky assets like BTC could.

Hayes says with a possible takeover of First Republic Bank by the Federal Deposit Insurance Corporation (FDIC) due to its financial uncertainty, the Feds could expand the emergency bank lending program they put in place last month to bail out troubled banks.

The Bank Term Funding Program offers one-year loans with the intention of alleviating liquidity pressures and helping banks protect depositors. Some have estimated this could result in up to $2 trillion in liquidity based on the number of banks that could use it.

According to Hayes, certain loan collateral requirements limit the financial assistance that the federal First Republic program can provide. However, Hayes believes this could prompt the Fed to expand program requirements, which would lead to more market liquidity.

“Another Friday, another US bank about to be killed by the FDIC.

The problem with FRC is that its balance sheet has few government bonds and a lot of other dog shit like commercial real estate loans that aren’t eligible collateral for the Bank Term Funding Program. So unless some Muppet bank decides to bail out FRC, the Bank Term Funding Program will expand over the weekend to allow other types of loans to be exchanged for freshly printed dollarz (US dollars).

And then BTC will take another step up as another few trillion dollars hit the tab. Money printer go Brrr!!!”

Bitcoin is trading at $29,416 at the time of writing, down 0.4% over the past 24 hours.

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