Topline<\/p>\n
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. <\/p>\n
Both leading cryptocurrencies surged to fresh records in recent weeks, only to be pulled down by market volatility.<\/p>\n
Getty ImagesKey Facts<\/p>\n
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.<\/p>\n
Bitcoin reached an all-time high above $126,000 on Oct. 6 while appearing a safe haven investment, following President Donald Trump\u2019s threat of 100% tariffs on China, before dropping 17.8% to Friday\u2019s low. <\/p>\n
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. <\/p>\n
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%).<\/p>\n
Big Number<\/p>\n
About $476 billion. That\u2019s how much was cut from the global crypto market\u2019s 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<\/a> to CoinGecko. <\/p>\n Why Are Crypto Prices Falling?<\/p>\n The cryptocurrency market appeared to react negatively to broader credit concerns expressed by regional banks over the last week. Zions Bancorp disclosed<\/a> it would take a $50 million loss in the third quarter because of a bad loan, while Western Alliance said<\/a> 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\u2019s 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<\/a> Tuesday he was cautious about the U.S. credit environment, saying the regional bank struggles are \u201cearly signs there might be some excess out there,\u201d adding, \u201cIf we ever have a downturn, you\u2019re going to see quite a bit more credit issues.\u201d About $593 million was withdrawn from U.S.-listed bitcoin and ethereum exchange-traded funds on Thursday, according<\/a> to Bloomberg.<\/p>\n Key Background<\/p>\n 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\u2014the first since a 35-day pause in 2018 and 2019\u2014will likely introduce a \u201cnew layer of uncertainty\u201d for markets, though they tend to be short-lived, LPL Financial\u2019s 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 \u201cno coin seems to have more [momentum] than ethereum of late,\u201d arguing ethereum started to \u201cshow some life relative to [bitcoin].\u201d A record-breaking rally for ethereum in August eclipsed an earlier all-time high set back in November 2021.<\/p>\n