After a week-long rout that wiped out hundreds of billions in digital asset value, Bitcoin has once again failed to live up to its reputation as a safe harbor asset.
Once intended as a hedge against market turmoil — a “digital gold” for the blockchain era — the native cryptocurrency stabilized in Singapore on Friday morning after sliding alongside global stocks and credits to hover around $109,000, according to data compiled by Bloomberg.
Bitcoin had reached an all-time high of $126,251 on October 6. Days later, a record number of liquidations, fueled by escalating trade tensions between the US and China, coincided with a sharp sell-off that included most major tokens. So far, the market has struggled to stage a sustainable recovery, even as heavyweights like Kraken, Circle, BitGo and Ripple delve deeper into the regulated financial sector – looking for trust charters, payment rails and card products.
“What is striking is that the timing of the crash coincides with major players pursuing banking licenses,” said Rachael Lucas, analyst at BTC Markets. The shift to traditional financial infrastructure “indicates a strategic hedge against volatility, with the aim of building legitimacy,” she added.
Risks arising from the US and China sparring over trade continue to plague risky assets outside of crypto.
The collapse of First Brands Group and Tricolor Holdings has revived fears about hidden credit losses, while fraud-related chargeoffs at Zions Bancorp and Western Alliance wiped out more than $100 billion from the value of the U.S. banking market in a single day.
As old havens like gold and silver continue to hit new highs, Bitcoin has been disappointed. In the week to October 12, interest rates fell by as much as 6.3%, the highest level since early March, and have not yet recovered. The same goes for most cryptocurrencies.
“More than anything, I think crypto is behaving like a canary in the coal mine, suggesting the market is tense due to emerging credit concerns,” said Matthew Hougan, chief investment officer at Bitwise.
Going forward, $107,000 is seen as a key support level for Bitcoin. A “decisive break to the downside risks a deeper downtrend,” Lucas said.
More stories like this are available at bloomberg.com
Published on October 17, 2025
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