Concerns about regulatory uncertainty in the U.S. haven't gone away, but this doesn't appear to be the driving force behind Friday's downturn.
Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts
Bitcoin's price has sunk below $20,000 — down 8% over the past 24 hours.
Ether has also fallen to its lowest level in two months and was trading at $1,405 at the time of writing.
Barring stablecoins, the top 50 altcoins are also in the red — with Dogecoin down 9.2%, Solana falling 9.5%, and Litecoin shedding 12.5%.
Concerns about regulatory uncertainty in the U.S. haven't gone away, but this doesn't appear to be the driving force behind Friday's downturn.
There have been widespread sell-offs in the global markets after the health of U.S. banks came into sharp focus.
Wednesday was dominated by crypto-focused Silvergate Bank, which had announced that it was winding down operations and entering into voluntary liquidation.
But on Thursday, it was the turn of Silicon Valley Bank, which has played a significant role in lending money to tech startups.
Investors were spooked after SVB announced that it was going to hold a $2.25 billion share sale — prompting some customers to speedily withdraw their deposits.
That came shortly after the bank incurred a $1.8 billion loss by dumping assets that included U.S. Treasuries. It did this because this portfolio was generating an average return of 1.79% — considerably less than the 3.9% that a 10-year Treasury yield currently offers.
Silicon Valley Bank's share price closed Thursday down 60% at $106.04 — and in pre-market trading on Friday, the stock had fallen another 22%, trading at $82.41.
There are now fears of a bank run at SVB, with the company's chief executive urging clients to "stay calm."
SVB served as a banking partner for close to 50% of venture-backed healthcare and tech startups that listed on the U.S. stock market in 2022.
Other financial institutions haven't been immune from these latest financial sell-offs, with Credit Suisse, Deutsche Bank and JPMorgan all sitting in the red.
When it comes to crypto-specific issues that may be dragging down prices, there has been some alarm at President Joe Biden's proposals to impose a 30% tax on crypto miners, which would be based on the cost of the electricity they use.
His administration has suggested that this would gradually be introduced over a three-year period — at 10% in year one, 20% in year two, and hitting 30% from year three onwards.
The U.S. has become a bigger player in the Bitcoin mining space over recent years following a clampdown in China, but many operators have been feeling the pain in the bear market.
Environmental concerns have also been raised, with New York imposing a two-year moratorium on new permits for Proof-of-Work mining.
The latest downturn means that Bitcoin has now fallen by 20.8% since hitting year-to-date highs of $25,134 last month.
