Important points
- Bitcoin and major cryptocurrencies experienced significant declines due to stress in U.S. local banks and concerns of a prolonged government shutdown.
- The market capitalization of cryptocurrencies fell 6% as investors moved to safe-haven assets following disclosures of large loan losses by regional US banks.
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Bitcoin lost more than $5,000 in less than six hours Friday morning, and most altcoins fell as concerns of a regional banking crisis grew and the U.S. government shutdown entered its third week.
Bitcoin plunged from nearly $109,000 to $103,500 earlier today before rebounding to more than $106,000, according to CoinGecko. It has fallen 4.5% in the past 24 hours.
During the same period, Ethereum and XRP each declined by about 6%, Solana by about 8%, and BNB by nearly 10%.
The total value of the cryptocurrency market fell 6% to $3.6 trillion, returning to the decline last recorded after President Trump’s comments on the US-China trade war.
New concerns about the health of U.S. regional banks may have contributed to the recent market decline.
This week, disclosures by Zions Bank and Western Alliance of huge loan losses and potential fraud-related exposures have shaken investor confidence, sent bank stocks tumbling and triggered a flight to safe-haven assets such as gold.
Gold approached $3,400 on Friday after continuing to set new highs throughout 2025.
The problems facing these banks have reignited fears of a possible credit crunch reminiscent of the Silicon Valley Bank (SVB) collapse in March 2023. But experts say the situation has not reached that scale yet.
Still, analysts warn that more banks disclosing losses, particularly those related to bad loans and off-balance sheet exposures, could heighten concerns about a broader credit crunch. Moreover, a prolonged government shutdown could further exacerbate the chaos, potentially turning it into a systemic crisis.
Analysts say Bitcoin is on sale as banking stress returns
Arthur Hayes, co-founder of BitMEX, said that Bitcoin is “on sale” as regional banks in the U.S. are once again in the doldrums.
Hayes said in a post on X that if the current turmoil turns into a crisis, investors should brace for a 2023-style bailout and view it as a buying opportunity.
“If the turmoil in America’s regional banks escalates to crisis level, we need to be prepared for a bailout like the one in 2023,” Hayes wrote. “Then let’s go shopping. Assuming you can afford it. I got the list, but what’s on it for your family?”
