Another bank bites the dust 🏦

"If you have to ask how much it costs, you can't afford it."

— J. P. Morgan

👋 Friends, Rallie here. The crypto and tech newsletter that serves your inbox with a dash of class.

On the menu:

• 🏦 Another bank bites the dust

• 🗞️ Headlines that hit

• 📈 Refresh: hot & cold wallets

• 💯 Top tweets

The Rallie Recap

📉 New goal: get through one month without another bank failing.

• On Monday, regulators seized First Republic Bank and sold its assets to JPMorgan Chase & Co, in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis, and the third failure of an American bank since March.

• First Republic was one of the U.S. banks that was hit the hardest by a crisis in confidence for the banking sector in March, when depositors fled en masse from smaller banks to giants like JPMorgan.

• And last week, the bank disclosed that it had more than $100B USD in outflows in Q1, which sent more investors fleeing, leading to it being seized by regulators and put into FDIC receivership alongside the sale of its assets.

• JPMorgan Chase, the largest U.S. bank, was the winner of a weekend auction for First Republic, securing all of the bank’s deposits, a majority of the bank's assets, and access to First Republic's coveted wealthy client base.

• Interestingly enough, in acquiring First Republic Bank, JPMorgan has bypassed laws against acquiring a bank while controlling 10%+ of U.S. deposits. 

• Then, on Tuesday, bank stocks fell, as traders questioned the future of regional financial institutions, and traders braced for the latest Federal Reserve policy announcement expected later this week.

📉 This saga probably isn't over... although we really wish it was.

Headlines That Hit

• 🤖 Gulp. Geoffrey Hinton, known as the “godfather of AI” is leaving his role at Google, and plans to warn of AI technology.

• 🖼️ Paint the future. Art auction house, Sotheby's, is expanding its NFT art offerings through the release of a specially curated, peer-to-peer secondary marketplace.

• 🤔 Related? Probably. The Bitcoin network hit an all-time high for the number of daily transactions processed, just as the U.S. government quietly brokered a bank buyout.

• 🎥 Pay up. Hollywood writers are officially on strike as they say their compensation doesn’t match the revenue generated in the streaming era.

Rallie Refresh: Hot & Cold Wallets

In crypto terms, a "wallet" is a digital storage solution that is used to access and manage cryptocurrencies. And when it comes to keeping your digital assets safe, understanding the difference between hot and cold wallets is crucial. So today, we're breaking it down for you:

Hot Wallet:

• A hot wallet is a type of software wallet that stores cryptocurrencies on devices connected to the internet, such as mobile devices or computers.

• As hot wallets are connected to the internet, they are inherently more vulnerable to hacking and theft.

• They are ideal for frequent trading and transactions due to their accessibility.

• Hot wallets are often used for storing smaller amounts of cryptocurrency that can be quickly accessed.

• Examples of hot wallets include online exchanges or mobile wallets (such as Coinbase or Binance), or desktop and web wallets (such as MetaMask).

Cold Wallet:

• A cold wallet is a type of hardware wallet that stores cryptocurrencies offline, typically on a specialized device such as a USB drive or a smartcard.

• Cold wallets are not connected to the internet, and therefore, are more secure...making them ideal for long-term storage of larger amounts of cryptocurrency.

• Cold wallets require a bit more effort to access funds, as they must be connected to a computer and require a password or pin.

• Examples of cold wallets include Ledger Nano S, Trezor, and KeepKey.

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Congrats, you made it to the end!

That's all for today. Stay hungry & we'll catch you next time. ✌️

DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.