A visual representation of the cryptocurrency Bitcoin on November 20, 2018 in London, England.
Jordan Mansfield | Getty Images News | Getty Images
Cryptocurrencies jumped on Wednesday as investor concerns about the U.S. banking sector began to swell again, with First Republic Bank fighting for survival.
Bitcoin jumped 8% to $29,828.25, according to Coin Metrics. That helped lift ether, which advanced 6% to $1,957.02. Both crypto assets are still below the key levels of $30,000 and $2,000, respectively, that they traded at two weeks ago for the first time since last year.
Bitcoin had been trading sideways for several days, with volatility back to its lows of early March, before the banking crisis began and became one of the cryptocurrency’s biggest upward catalysts this year. Now, troubles at First Republic could be helping drive the cryptocurrency’s price action again, according to Matt Hougan, chief investment officer at Bitwise Asset Management.
“Crypto rallies during banking crises, and it looks like the banking crisis may not be over,” Hougan said.
First Republic shares fell almost 50% to a record low on Tuesday after reporting a massive drop in deposits in the first quarter as customers pulled their money out following the collapse of Silicon Valley Bank. CNBC’s David Faber reported that the next few days are crucial for the company, as other banks and federal officials seek to pull together a rescue plan.
Bitcoin rallied 22% in March as the crisis among U.S. regional banks opened investors’ eyes to its potential uses as a hedge against uncertainty and as an alternative banking system.
“Bitcoin continues to straddle between being the ultimate lifeboat from the current banking system and the leading risk-on asset,” said managing partner James Lavish at Bitcoin Opportunity Fund. “As First Republic is now on the verge of collapse, bitcoin represents a safe haven versus uncertain bank deposits.”
Bitcoin’s 30-day rolling correlation with gold has been climbing since March and now stands at 57%, its highest level in almost two years, according to crypto data provider Kaiko.
The U.S. dollar index moved lower and was on pace for worst day since April 12, when bitcoin traded at its highs of this year. The two tend to have an inverse relationship.
Fed concerns on the horizon
While the pullback over the past week didn’t negate the year-to-date uptrend, uncertainty still looms over crypto.
Traders are watching the Federal Reserve for its latest decision on whether it will stop raising interest rates to fight high inflation and some direction and when it will begin cutting rates. The central bank’s next policy meeting will take place next week, and the latest reading on its preferred inflation gauge, personal consumption expenditures, is due out at the end of this week.
Bitcoin (BTC) this year
“The crypto market learned last month that banking crisis works favorably for bitcoin’s price but we need to approach it from multiple angles,” said Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank. “The Fed Funds futures market is pricing in the beginning of rate cuts later this year, and it could be a source of disappointment if the Fed continues to refrain from commenting on or even denies the possibility of rate cuts this year.”
Lip-Bu Tan, Chief Executive Officer of Intel, appears at an event organized by the company.
Andrej Sokolow | Picture Alliance | Getty Images
Intel‘s stock dropped 9% after the chipmaker said it would slash foundry costs in its latest attempt to turnaround its struggling business.
Concerns about where that leaves Intel’s chip manufacturing business overshadowed a better-than-expected earnings report late Thursday. Intel beat on revenue and issued a sales forecast for the third quarter that also topped estimates. The company reported adjusted earnings of 10 cents per share, topping the average analyst estimate of a penny, according to LSEG.
CEO Lip-Bu Tan, who was appointed to the job in March, wrote in a memo to employees that the company’s forthcoming chip manufacturing process, called 14A, will be built out based on confirmed customer commitments and that there will be “no more blank checks.” In a filing with the SEC on Thursday, Intel said it may “pause or discontinue” its foundry business entirely if it could not secure a customer on its next technology cycle.
“We have been unsuccessful to date in securing any significant external foundry customers for any of our nodes and our prospects for securing a significant external foundry customer for Intel 14A are uncertain,” the company said in the filing.
Intel’s drop on Friday wiped out most of its rally for the year. The shares lost 60% of their value in 2024, their worst year on record. The slump reflected Intel’s inability to make much headway in the artificial intelligence market, which is dominated by Nvidia, as well as skepticism surrounding its foundry bet.
The company said it’s axing chip facility projects in Germany and Poland and slowing production at its Ohio plant. Intel depends on a large customer for its foundry business to succeed.
“Management wants external customer commitments to pursue the node, but in the meantime, this adds more uncertainty to product roadmaps and makes customer adoption more unlikely,” analysts at Barclays, who have the equivalent of a hold rating on the stock, wrote in a note to clients.
Tan, who replaced Pat Gelsinger as CEO, said in the memo that his first few months at the helm of the company have “not been easy.” Intel has gone through with most of its layoff plans, which will result in eliminating 15% of its workforce and finishing the year with 75,000 employees.
“Over the past several years, the company invested too much, too soon – without adequate demand,” Tan wrote. “In the process, our factory footprint became needlessly fragmented and underutilized,” he added
Intel’s net loss widened to $2.9 billion, or 67 cents per share, from $1.61 billion, or 38 cents in the year-ago period. The company recorded an $800 million impairment charge, “related to excess tools with no identified re-use.”
Analysts at JPMorgan Chase called Intel’s foundry decision a “positive step,” although ongoing market share losses remain a concern.
Chris Martin of Coldplay performs live at San Siro Stadium, Milan, Italy, in July 2017.
Mairo Cinquetti | NurPhoto | Getty Images
Days after Astronomer CEO Andy Byron resigned from the tech startup, the HR exec who was with him at the infamous Coldplay concert has left as well.
“Kristin Cabot is no longer with Astronomer, she has resigned,” a company spokesperson wrote in an email to CNBC Thursday. Cabot was the company’s chief people officer.
Cabot and Byron, who is married with children, were shown in an intimate moment on the ‘kiss cam’ at a recent Coldplay show in Boston, and immediately hid when they saw their faces on the big screen. Lead singer Chris Martin said, “Either they’re having an affair or they’re just very shy.” An attendee’s video of the incident went viral.
Byron resigned from the company on Saturday. Both Cabot and Byron have been removed the company’s leadership team webpage.
Pete DeJoy, Astronomer’s interim CEO, wrote in a post earlier this week that recent and unexpected national attention has turned the company into “a household name.”
In May, the New York-based company, which commercializes open source software, announced a $93 million investment round led by Bain Ventures and other investors, including Salesforce Ventures.
Elon Musk‘s satellite internet service Starlink said it had a “network outage” on Thursday. The company said it was working on a solution.
There were more than 60,000 reports of an outage on Downdetector, a site that logs issues.
Starlink is owned and operated by SpaceX, which is also run by Musk.
Musk apologized for the outage on his social media platform X and said, “Service will be restored shortly.”
Musk posted earlier Thursday that the company’s direct-to-cell-phone service was “growing fast” following the announcement that T-Mobile‘s Starlink-powered satellite service was available to the public.
T-Mobile said the T-Satellite service was built to keep phones connected “in places no carrier towers can reach.”
Starlink didn’t immediately respond to a request for comment.
Starlink internet speeds and reliability decrease with popularity, a recent study found.
It wasn’t immediately clear if the T-Satellite service was affected by or involved in the outage.