Topline
Bitcoin fell to a four-month low on Friday, headlining declines for cryptocurrencies over the last week while falling nearly 18% from an all-time high, as investors appeared to pull away from the market after regional banks disclosed exposures to bad loans.
Both leading cryptocurrencies surged to fresh records in recent weeks, only to be pulled down by market volatility.
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Key Facts
The price of bitcoin dropped Friday morning by as much as 6.4% to around $103,600, the lowest level for the cryptocurrency since June, before paring back earlier losses to settle at about $105,700 as of 9:30 a.m. EDT.
Bitcoin reached an all-time high above $126,000 on Oct. 6 while appearing a safe haven investment, following President Donald Trump’s threat of 100% tariffs on China, before dropping 17.8% to Friday’s low.
Ethereum is similarly down 25.7% from its all-time high set in August, falling from $4,955 to a low of $3,679 on Friday.
The broader crypto market followed its leading tokens over the last 24 hours, with declines headlined by BNB (down 10.6%), XRP (7.4%), Solana (8.3%), Tron (4.8%), and the meme token dogecoin (8.7%).
Big Number
About $476 billion. That’s how much was cut from the global crypto market’s aggregate market value between Oct. 9 and Oct. 16, falling from just over $4.24 trillion to around $3.76 trillion as of Thursday, according to CoinGecko.
Why Are Crypto Prices Falling?
The cryptocurrency market appeared to react negatively to broader credit concerns expressed by regional banks over the last week. Zions Bancorp disclosed it would take a $50 million loss in the third quarter because of a bad loan, while Western Alliance said it would sue a borrower over allegations of fraud. Those followed bankruptcy filings from auto lenders First Brands and Triocolor Holdings last month, boosting Wall Street’s volatility index to a high of 28.99, its highest level since Trump announced widespread tariffs on U.S. trading partners in April. JPMorgan Chase CEO Jamie Dimon said Tuesday he was cautious about the U.S. credit environment, saying the regional bank struggles are “early signs there might be some excess out there,” adding, “If we ever have a downturn, you’re going to see quite a bit more credit issues.” About $593 million was withdrawn from U.S.-listed bitcoin and ethereum exchange-traded funds on Thursday, according to Bloomberg.
Key Background
Investors appeared to rally around safe-haven investments like gold and silver as a government shutdown loomed earlier this month, leading to a rise for both metals as well as bitcoin, which was previously seen as a risk asset like equity during periods of economic uncertainty. The government shutdown—the first since a 35-day pause in 2018 and 2019—will likely introduce a “new layer of uncertainty” for markets, though they tend to be short-lived, LPL Financial’s chief strategist Adam Turnquist wrote. Bitcoin and other cryptocurrencies have surged under the latest Trump administration, however, as Republicans have pushed pro-crypto legislation while Trump unveiled his own meme token, $TRUMP, in January. Wall Street favored ethereum during the Trump-related boost for crypto markets, as Wolfe Research broker Read Harvey wrote earlier this year that “no coin seems to have more [momentum] than ethereum of late,” arguing ethereum started to “show some life relative to [bitcoin].” A record-breaking rally for ethereum in August eclipsed an earlier all-time high set back in November 2021.