BTC Reaches $28K As UBS Agrees To Buy Credit Suisse• March 20, 2023 11:34 am • Comments
UBS Group, the largest bank in Switzerland, just reached a new deal to acquire Credit Suisse for roughly $3.25 billion.
This will obviously have major impacts on the global banking system given the size of Credit Suisse and the amount of assets that the firm managed.
The acquisition cost was actually 60% less than the current value of Credit Suisse which indicates that there was a lot of desperation in order to reach a deal and gives clue to how troubled the bank really was.
As a result of the merger, it seems that the crypto markets continued to react positively as Bitcoin finally reached the $28k milestone which was the first time that it had done so in a long time.
The last time BTC had reached this amount was more than a year ago which was in June 2022.
NOW – Swiss government confirms Credit Suisse takeover by UBS and says, "the bankruptcy of a global systematically important bank would have caused irreparable economic turmoil." pic.twitter.com/tAP88HMKu3
— Disclose.tv (@disclosetv) March 19, 2023
The Swiss banking behemoth Credit Suisse revealed significant operational issues in the past few weeks, prompting Switzerland’s central bank and the local financial regulator to step in.
UBS responded to the intervention, agreeing to acquire Credit Suisse for $3.25 billion. Under the terms of the agreement, all shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse.
The ailing bank will continue conducting its business as normal until finalizing the merger deal. Moreover, the Swiss National Bank will allow it access to facilities that offer substantial additional liquidity.
“Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome.
This has been an extremely challenging time for Credit Suisse, and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome,” Credit Suisse’ Chairman of the Board of Directors – Axel Lehmann – commented.
Based on the current data, BTC us up around 70% since the start of the year with the bull rally being caused likely by multiple factors.
It is unclear still what the long term effects are on the traditional financial markets and the crypto markets due to the collapse of Silicon Valley Bank, Signature Bank, and Silvergate Capital.
All three institutions were heavily involved in the crypto sector and held capital for crypto firms.
Although all the unsecured deposits were still made accessible to all the firms, it seems that there has been a large outflow of capital since the panic.
As a result, it is expected that many crypto firms may start to look into alternative ways to invest and to diversify their assets for additional protection.
— XcelPay – Crypto Wallet (@XcelPayWallet) March 20, 2023
On Sunday, news hit the wires of UBS AG (UBS) agreeing to acquire Credit Suisse Group AG (CS).
Before the deal, the banking crisis had shone the light on BTC and the broader crypto market. Regulators and lawmakers may need to change tact, with the collapse of two US banks and the UBS acquisition of Credit Suisse a close call for investors across more traditional asset classes.
US Senator Elizabeth Warren requested an investigation into the collapse of Silicon Valley Bank and Signature Bank (SBNY), noting that they were the second and third-largest bank failures in US history.
Senator Warren was scathing and assigned responsibility to bank executives and the Federal Reserve for regulatory rollbacks that allowed the failures to happen.
BREAKING: UBS has agreed to buy Credit Suisse for more than $2 billion, according to the Financial Times
Credit Suisse was a $7 billion company on Friday
— Genevieve Roch-Decter, CFA (@GRDecter) March 19, 2023
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