Bitcoin News Today: Wall Street Warns of 6.6 Trillion Crypto Price Crash Risk Amid Stablecoin Policy Shift

Wall Street has issued a significant warning about the $6.6 trillion cryptocurrency market, heightening concerns of a potential price crash across major digital assets, including Bitcoin, Ethereum, and XRP. The warning, highlighted in a Forbes Digital Assets report on August 16, 2025, reflects growing unease among institutional investors and financial analysts regarding the market’s stability following a recent peak [1].

Bitcoin, which reached an all-time high of $124,000 earlier in the week, has since fallen to around $114,000—a decline of roughly 10%. Ethereum and XRP have also seen similar declines, with altcoins falling approximately 5% in the last 24 hours—twice as much as Bitcoin [1]. The overall crypto market capitalization has dropped to $3.88 trillion, its lowest level in over two weeks, raising fears of a broader correction [1].

The warning is tied to the recently passed Genius Act stablecoin bill, which some U.S. banking groups fear could trigger massive account withdrawals if stablecoin issuers are allowed to offer interest to holders. According to a Treasury Department report, stablecoins could cause up to $6.6 trillion in deposit outflows, depending on whether they can provide yield. This has led major U.S. banking associations to urge Congress to close a loophole in the Genius Act that allows stablecoin issuers to offer yields through affiliated entities [1].

JPMorgan Chase, among other major financial institutions, has expressed concerns over the growing influence of stablecoins, particularly those that could compete with traditional banking services. The report from the Bank Policy Institute, signed by multiple banking associations, emphasizes the need to protect the stability of financial markets and the flow of credit to businesses and households [1].

FXEmpire also noted that traditional financial institutions are becoming increasingly cautious about the crypto sector’s exposure to macroeconomic risks, including interest rate changes and regulatory shifts [3]. This growing skepticism has historically preceded market corrections in the crypto space, with analysts warning of a potential domino effect where a downturn in one major asset could trigger a broader sell-off [1].

Investors are now closely monitoring the market for signs of stabilization or further deterioration. While the exact timeline and extent of a potential crash remain uncertain, the repeated emphasis on this Wall Street warning in multiple credible sources underscores the gravity of the situation. The market is at a critical juncture, with many questioning whether it can maintain its current valuation amid global economic uncertainty.

Sources:

[1] Forbes Digital Assets (https://www.forbes.com/sites/digital-assets/2025/08/18/wall-street-issues-serious-66-trillion-crypto-warning-as-price-crash-fears-hit-bitcoin-ethereum-and-xrp/)

[3] FXEmpire (https://www.fxempire.com/crypto/ripple/news)