Bitcoin Rallies As UBS Group Acquires Troubled Lender Credit Suisse In $3.2 Billion Deal
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Bitcoin Rallies As UBS Group Acquires Troubled Lender Credit Suisse In $3.2 Billion Deal

written by John Murphy | March 20, 2023

The Swiss National Bank said the UBS and Credit Suisse deal will bring more financial stability to the market.  

The Swiss central bank said the acquisition offered a solution to “ensure financial stability and protect the Swiss economy in this exceptional situation”. The transaction was made possible by the central bank in cooperation with the Swiss government and the Swiss Financial Market Supervisory Authority.  

Bitcoin Rallies After UBS-Credit Suisse Deal:

Bitcoin (BTC) and the broader cryptocurrency market saw a strong rally as soon as news of the UBS and Credit Suisse deal broke. BTC price surged to $28,400, followed by the altcoin sector. The price of Ethereum (ETH) also crossed $1,800 on Sunday night. 

UBS Acquires Credit Suisse For $3.2 Billion

In a major move in the banking industry, UBS Group has acquired Credit Suisse in a deal worth $3.2 billion. The acquisition comes as Credit Suisse has struggled with financial losses and a damaging scandal involving its investment division. UBS sees the acquisition as an opportunity to expand its wealth management business and strengthen its presence in Switzerland.

Bitcoin Rallies On News Of Acquisition

Bitcoin has rallied on the news of UBS Group’s acquisition of Credit Suisse. The cryptocurrency, which has been on a rollercoaster ride in recent months, has seen a significant upward trend in the wake of the acquisition. Bitcoin enthusiasts see the acquisition as a step towards greater mainstream adoption of cryptocurrency and a potential hedge against inflation.

Experts Weigh In On The Potential Impact Of The Acquisition

Financial experts are divided on the potential impact of UBS Group’s acquisition of Credit Suisse. Some see the move as a positive development for the banking industry, citing UBS’s strong history of financial stability and its potential to help revive the struggling Credit Suisse.

Others are more cautious, noting the challenges inherent in integrating two large financial institutions and the potential risks associated with taking on troubled assets.

What The Acquisition Means For Investors

For investors, the acquisition of Credit Suisse by UBS Group presents both opportunities and risks. On the one hand, the acquisition could serve as a catalyst for growth and increased profitability for UBS. On the other hand, the merger presents potential risks, including the possibility of regulatory hurdles and the potential for lower returns on investment.

UBS Group’s acquisition of Credit Suisse is a major development in the banking industry that is likely to have a significant impact on the financial markets. 

The UBS Group and the troubled banking lender Credit Suisse have been working to negotiate a deal over the past weekend with the assistance of Swiss regulators, the Swiss National Bank, and others. The agreement was finalized on Sunday night, March 19.

As part of the emergency ordinance and to prevent financial instability, the UBS Group purchased the struggling competitor for $3.25 billion. This is in excess of a 60% markdown from the $8 billion valuations of Credit Suisse only two back on Walk 17. Colm Kelleher, Chairman of UBS, stated the following regarding the development:

“This acquisition is appealing to shareholders of UBS; however, let us be clear: Credit Suisse views this as an emergency rescue.” We have planned a deal that will keep the business’s remaining value while limiting our risk of loss”.