Bitcoin Rallies As UBS Group Acquires Troubled Lender Credit Suisse In $3.2 Billion Deal
Over the last weekend, Swiss regulators, the Swiss National Bank, and others have been working to broker a deal between the UBS Group and the troubled banking lender Credit Suisse. On Sunday evening, March 19, the deal finally came to fruition.
The UBS Group acquired the ailing competitor in a $3.25 billion deal as part of the emergency ordinance and to prevent financial instability. This is more than a 60% discount from the $8 billion valuations of Credit Suisse just two back on March 17. Speaking on the development, UBS Chairman Colm Kelleher said:
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. We have structured a transaction which will preserve the value left in the business while limiting our downside exposure”.
The Swiss central bank stated that this takeover provides a solution to “secure financial stability and protect the Swiss economy in this exceptional situation”. This deal comes through as the central bank worked with the Swiss government, as well as the Swiss Financial Market Supervisory Authority.
As per UBS, the combined bank will have a total of $5 trillion in invested assets. To broker this deal, the Swiss authorities had to bend some regulations to bypass a shareholder vote. As per the Bloomberg report, the Swiss Central Bank has also agreed to provide $100 billion in liquidity to UBS.
Bitcoin Rallies After UBS-Credit Suisse Deal
Soon as the news of the UBS-Credit Suisse deal came out, Bitcoin (BTC) and the broader crypto market registered a strong rally. The BTC price surged all the way to $28,400 followed by a rally in the altcoins space as well. Ethereum (ETH) price too climbed past the $1,800 level on Sunday evening.
Bitcoin and the broader crypto market have delivered a strong performance amid the recent crisis in the global banking sector. Popular angel investor Balaji Srinivasan believes that the banking crisis will get worse and the Fed will resolve to money printing once again to prevent it. This could lead to a situation of hyperinflation and the BTC price could touch $1 million in the next 90 days.