Unveiled by the Federal Deposit Insurance Corporation (FDIC), unrealized losses amounting to $517 billion plague the US banking industry, raising concerns about economic stability and financial sector resilience. The FDIC's revelation of 63 banks on the brink of insolvency has triggered apprehension about the industry's future.

The ISM Manufacturing PMI reported a larger-than-expected decline, registering 48.7, below the anticipated 49.6. With the specter of a potential interest rate cut by the US Federal Reserve looming amidst disappointing industrial figures, Bitcoin surged past $70,000 recently.

Under Immense Strain

US financial institutions are grappling with mounting pressure from rising interest rates and deferment of rate reductions. The termination of the Bank Term Funding Program (BFTP) on March 11 exacerbated the vulnerability of banks, particularly regional ones, already teetering on the edge.

In Q1 2024, approximately 63 US banks are burdened with $517 billion in unrealized losses, imperiling the country's banking sector significantly, as per the FDIC's assessment. The increment of $39 billion in unrealized losses during the first quarter escalated the total to $517 billion, mirroring a troubling trend persisting over nine consecutive quarters since the Federal Reserve commenced interest rate hikes in 2022.

The looming threat of bank runs is anticipated to fuel momentum in the cryptocurrency market and elevate Bitcoin's price. However, the Federal Reserve and the Treasury Department are likely formulating precautionary measures, particularly due to the ongoing election year.