The cryptocurrency market is facing significant challenges after a sharp decline in bitcoin and ethereum prices. The biggest cryptocurrencies, including bitcoin, ethereum, and XRP, have plummeted by around 10% to $114,000 for bitcoin, despite the recent all-time high of $4.2 trillion this month. The fall comes just as Tesla billionaire Elon Musk breaks his silence on crypto.
Wall Street giants are warning Congress about a potential $6.6 trillion flood of account withdrawals triggered by the recently passed Genius Act stablecoin bill. This could undermine the banking system and lead to a broader market crash. The U.S. banking groups, including JPMorgan and Bank of America, have urged lawmakers to close a loophole in the bill that allows issuers of dollar-pegged cryptocurrencies to offer yields via affiliates.
The bitcoin price has dropped towards $113,000 before bouncing back to around $115,000, dragging down the wider crypto market. Analysts say the decline is likely due to profit-taking after the sharp rally over the first two weeks of August or a deeper and more protracted sell-off. The closely-watched crypto fear and greed index has swung from 68 last week to just 56, putting it on the verge of “fear” territory.
The upcoming Jackson Hole economic policy symposium is expected to draw attention to Federal Reserve chair Jerome Powell’s speech, which may influence the Fed interest rate cut in September. Market analysts say that if Powell signals a slower path to easing at Jackson Hole, markets could reprice aggressively, tightening financial conditions and putting pressure on crypto prices.
The stablecoin market is also facing increasing competition following the passage of the Genius Act. Tether’s USDT remains the dominant stablecoin but faces competition from Wall Street giants, technology companies, and financial technology companies. The Treasury Department report estimates that stablecoins could trigger up to $6.6 trillion in deposit outflows, depending on whether they can offer interest or yield.
The bitcoin price has dropped to its lowest level in 11 days at around $115,000, testing the 50-day moving average. Analysts warn that a consolidation below this line could sharply increase the chances of a deeper correction and a failure below $112,000 could confirm the correction, opening the potential for a decline to $105,000-107,000.
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Source: https://www.forbes.com/sites/digital-assets/2025/08/19/wall-street-issues-serious-66-trillion-crypto-warning-as-price-crash-fears-hit-bitcoin-ethereum-and-xrp