The impact of the Credit Suisse bank crisis on the crypto market

March 22, 2023 Coin Telegraph

Banking

Cointelegraph analyst and writer Marcel Pechman explains how the Credit Suisse bank crisis will impact the crypto market.

The show Macro Markets, hosted by Marcel Pechman, which airs every Friday at 12 pm ET on the Cointelegraph Markets & Research YouTube channel, explains complex concepts in layman’s terms and focuses on the cause and effect of traditional financial events on day-to-day crypto activity.

In today’s episode, crypto analyst Pechman discusses how to analyze banks — importantly, how to avoid the erroneous market capitalization indicator, which had a $15.8-billion value for the defunct Silicon Valley Bank (SVB).

The enterprise value (EV) metric provides a much better picture of a bank’s balance sheet terms by subtracting net debt from market cap. Of course, Pechman first explains the relationship between banking valuation and cryptocurrencies, specifically Bitcoin’s (BTC) ethos.

The video explores the 2018 denial of The Narrow Bank’s application, a bank that would not leverage client deposits and would only invest in United States Treasurys. This is a fascinating tale — you should watch the whole episode on YouTube for more information.

Pechman explains why an eventual crypto pump caused by a banking industry collapse would not be sustainable, as recession risks outweigh initial enthusiasm. The video goes on to compare bond (debt) markets to gold, equities and real estate.

The episode concludes with a quick look at unrealized losses and how the debt markets could spark a massive bull run for Bitcoin and cryptocurrencies.

If you are looking for exclusive and valuable content provided by leading crypto analysts and experts, make sure to subscribe to the Cointelegraph Markets & Research YouTube channel. Join us at Macro Markets every Friday at 12:00 pm ET.

Why is Bitcoin rising amid collapsing banks? Watch The Market Report

March 21, 2023 Coin Telegraph

Banking

On this week’s episode of The Market Report, Cointelegraph’s resident expert explains why Bitcoin is rising and why banks are collapsing.

This week on The Market Report, our beloved host, Joe Hall, and insightful expert, Sam Bourgi, unfortunately, could not make it, but don’t worry because Marcel Pechman is here to discuss why he thinks Bitcoin’s (BTC) price is rising amid collapsing banks.

We kick things off with this week’s first article:

UBS Group agrees to $3.25B “emergency rescue” of Credit Suisse

UBS Group agreed to buy its ailing competitor Credit Suisse for $3.25 billion on March 19 as part of an “emergency ordinance” to prevent financial market instability. To close the deal, Swiss authorities agreed to change the country’s regulations to bypass a shareholder vote and announce the deal over the weekend ahead of the market opening. Was this move actually legal? After this move, will Switzerland still have a reputation for being the securest financial market? Pechman has much to say on this matter and addresses the issue with Credit Suisse debt holders, so watch the whole video because you won’t want to miss his insights.

Investors shelter in short-term Treasurys, reducing Bitcoin’s chance of rallying to $30K

The price of Bitcoin surpassed $28,000 on March 21, but according to two derivatives metrics, traders aren’t very ecstatic after a 36% gain in eight days. Looking beyond Bitcoin’s stellar performance, there are reasons investors are not fully confident in further price upside. The recent rescue of Credit Suisse, a 167-year-old leading Swiss financial institution, proves that the current global banking crisis might not be over. Pechman explains why the price of Bitcoin might not touch $30,000 just yet.

The Market Report airs every Tuesday at 12:00 pm ET (5:00 pm UTC), so be sure to head on over to the Cointelegraph Markets & Research YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

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Several Major Central Banks Take Coordinated Action to Boost Liquidity Amidst Banking Crisis

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UBS Group doubles offer and acquires Credit Suisse for $2B

March 19, 2023 Coin Telegraph

UBS Group doubles offer and acquires Credit Suisse for B

Banks

Swiss authorities agreed to change the country's regulations to bypass a shareholder vote and announce the deal over the weekend.

UBS Group doubled its initial offer and agreed to buy its competitor Credit Suisse for nearly $2 billion on March 19, in a historical deal for the two biggest banks in Switzerland, the Financial Times reported.

UBS previously put a $1 billion offer on the table on March 18, but the deal was rejected by the Credit Suisse board, FT sources said. The $1 billion offer was a considerable discount under the bank's market value on March 17 of nearly $8 billion, according to data from Companies Market Cap.

To close the deal, Swiss authorities also agreed to change the country's regulations to bypass a shareholder vote and announce the deal over the weekend, ahead of the markets opening.

Also, as part of the deal, the Swiss National Bank (SNB) committed to provide over $100 billion in liquidity line to USB. According to the FT, the deal was heavily influenced by the SNB and the Swiss Financial Market Supervisory Authority (FINMA). United States and European regulators are said to have approved the deal, with coordinated statements to be released later on Sunday.

UBS is taking over Credit Suisse pic.twitter.com/XF8LEZFXlx
— David Gura (@davidgura) March 19, 2023

Swiss authorities considered alternatives to Credit Suisse in case the deal with UBS failed over the weekend, including a full or partial nationalization of the bank as an emergency option.

Credit Suisse's rescue plan would also include losses to bondholders. The move prompted European regulator's concerns that it would undermine investor confidence in Europe's financial sector.

UBS and Credit Suisse have been locked in talks with regulators since March 15, after Credit Suisse largest shareholder, Saudi National Bank, said during an interview that it wouldn't increase its investment in the Swiss bank due to regulations. Concerns about the bank's ability to profit were heightened by the comments, raising fears about possible shareholder financing.

Credit Suisse was founded in 1856 to finance the expansion of Swiss railroads. It was considered the second-largest bank in the country.

Google Trends Data Reveals Searches for ‘Banking Crisis,’ ‘Bank Runs,’ Skyrocket

March 19, 2023 Bitcoin.com

Credit Suisse rescue plan may include nationalization, bondholder losses

March 19, 2023 Coin Telegraph

Banks

A bank rescue plan for Credit Suisse may impose losses on its bondholders and even result in a full or partial nationalization of Credit Suisse Group AG.

A rescue plan for Swiss banking giant Credit Suisse may impose losses on its bondholders and even result in a full or partial nationalization of Credit Suisse Group AG, multiple reports revealed on March 19.

Swiss authorities are considering applying losses to Credit Suisse bondholders as part of the bank's ongoing recovery efforts, Reuters learned from two sources. European regulators are concerned that the move might undermine investor confidence in Europe's financial sector.

Another report from Bloomberg claims that the Swiss government is analyzing a full or partial nationalization of the bank, the only available alternative if the UBS takeover is not completed. Investment bank UBS is Switzerland’s largest bank.

Can anyone else remember seeing European bank CDS and bonds quoted on a Sunday before? Very surreal!
— Robert Smith (@BondHack) March 19, 2023

On March 18, the Swiss National Bank (SNB) and Switzerland’s financial regulator said Credit Suisse's acquisition by UBS is the “only option” to prevent a “collapse in confidence” in Credit Suisse.

The nationalization would be an emergency option due to the complexities surrounding the deal and the limited time available. Swiss authorities are working over the weekend on "emergency measures" to accelerate the deal before Asian markets open, including allowing the deal to proceed without a shareholder vote.

UBS is reportedly asking the government to shoulder around $6 billion on legal costs and potential future losses in the event of a takeover. UBS is offering $1 billion for Credit Suisse, a considerable discount under the bank's market value on March 17 of nearly $8 billion, according to Companies Market Cap.

*Market capitalization history of Credit Suisse, 2001-2023. Source: Companies Market Cap*

Swiss authorities are also concerned about job losses due to the deal. According to reports, Credit Suisse was previously considering laying off 9,000 employees to save its business.

Investment company BlackRock denied on March 18 plans or interest in acquiring Credit Suisse. "BlackRock is not participating in any plans to acquire all or any part of Credit Suisse, and has no interest in doing so," the firm said on Twitter.