Western Alliance Shares Crash 53% After Reports Of Potential Sale

May 5, 2023 2:46 pm Comments

It looks like there is the possibility that there will once again be another bank that may shutdown and needs to be rescued.

Recently, it was revealed that Western Alliance bank might be exploring potential sale options which caused the stock of the company to crash 53%.

The reaction from the market is no surprise as there have been many banks that have gone through the same thing in the past two months.

The increasing risk of storing capital in banks have caused investors to look to diversify their assets into alternatives such as Bitcoin and other digital assets.

Western Alliance has not confirmed that these reports are true and actually denies the report, but the news has already affected the financial markets.

Watcher.guru reports:

The Financial Times reported earlier that the bank is exploring strategic options, including a potential sale. Following the report, the share prices of WAL also plummeted by 53%.

The report by the Financial Times also cited that the Arizona-based bank is hiring advisors to reportedly explore its options for sale.

The report also mentioned that the bank’s considerations are still at an early stage and might not come to anything. The Financial Times report is based on the details provided by two people who were familiar with the matter.

Banks have been in turmoil since 2023 and have been taking a tough stance. With the collapse of numerous banks, users are also steering toward cryptocurrencies as a safer way to store money.

At the same time, it looks like there is a very high chance that Bitcoin will once again surpass the $30k mark as the asset has shown a positive reaction to the news.

At the time of writing, BTC currently stands at $29.5k and has been consolidating within a range for the past few days.

If any news gets released about the banking situation getting worse, it should be enough of a bullish catalyst for Bitcoin to enter a bullish rally.

As many would expect, Western Alliance has already claimed that the reports are not true, but it seems that this is not quite enough to restore investor confidence.

After all, the price of the shares have dropped significantly from where it originally was.

BeInCrypto concludes:

The lender tried to reassure investors and customers in a May 4 update published on its website. Attempting to convince them that the news that has shaken the banking world in recent weeks and months has left PacWest largely untouched.

“The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news,” its statement read. It cited an increase in core customer deposits since March 31, to a present total of $28 billion.

But the US banking sector has been on edge since the collapse of three banks in March. The toppling of Silvergate, Signature Bank, and Silicon Valley Bank represented the biggest banking crisis since 2008. Time will tell where it ends and what banks are left standing.

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