Wall Street Warns $6.6 Trillion Crypto Withdrawal Risk Amid Bitcoin Price Drop

Major cryptocurrencies including Bitcoin, Ethereum, and XRP have experienced sharp declines following a recent peak, raising concerns about a potential crypto market crash. Bitcoin dropped from an all-time high near $124,000 to around $114,000, with the overall crypto market capitalization falling to approximately $3.88 trillion. Wall Street financial institutions, including JPMorgan and Bank of America, have issued warnings about the risks posed by the recently passed Genius Act stablecoin bill, which could trigger up to $6.6 trillion in deposit outflows if stablecoin issuers are allowed to offer yields through affiliates. This has prompted banking groups to urge Congress to close a loophole in the bill to prevent destabilizing withdrawals that could undermine the banking system. Market dynamics also show significant liquidations, particularly of leveraged longs, and rising speculative activity in Bitcoin derivatives, suggesting heightened volatility ahead. Meanwhile, concerns about Federal Reserve monetary policy and upcoming economic policy events have contributed to market anxiety and influenced crypto price movements.