Bitcoin Steady at $43K as Tumbling U.S. Regional Bank Stocks Reignite Worries

Bitcoin BTC$89 638,12 remained steady at around $43,000 Thursday as tumbling U.S. regional bank stocks reignited fears about the health of U.S. lenders and a rerun of last March's banking crisis.

Shares of New York Community Bancorp (NYCB) extended decline to over 40% since Tuesday, reaching similar troughs as last March after it reported losses stemming from its commercial real estate loans and dividend cut. The KBW Nasdaq Regional Bank Index (KBR), a benchmark for the sector, edged another 2% lower following yesterday's largest daily decline since March.

Market observers also mulled the importance of the Federal Reserve removing a key language addressing the resiliency of the U.S. banking system in its Wednesday statement about its interest rate decision that appeared in previous instances, a development mostly trumped at the time by Fed Chair Powell quashing hopes of imminent rate cuts. "Who would've thought the removal of 'the U.S. banking system is sound and resilient' would be the most important line yesterday," Quinn Thompson, head of capital markets and growth at lending platform Maple Finance, said in an X post, noting traditional safe haven asset gold's uptick relative to U.S. bank stocks.

During last March's "banking crisis," notably, bitcoin rallied sharply – after a short-lived decline – nearly to $30,000 from $20,000 emerging as a perceived "safe haven" asset independent from the banking system's woes.

Read more: Bitcoin Is a Clear Winner of the U.S. Banking Crisis

This time, bitcoin's price action has been muted so far. The largest crypto by market cap slightly bounced higher from below $42,000 earlier during the day, consolidating in the familiar channel capped at $44,000.

At press time, BTC changed hands at just below $43,000, up 1% over the past 24 hours. The CoinDesk 20 {{CD20}}, a broad crypto market benchmark tracking the largest crypto assets, gained 1.5% during the same period.

"Whatever the reason for BTC’s 'risk off' behavior yesterday, it highlights the fascinating yet confusing duality of the BTC market – sometimes it’s a macro risk asset, sometimes it’s a hedge against macro risk," Noelle Acheson, analyst and author of Crypto Is Macro Now newsletter, wrote Thursday.

Maple's Thompson said he was surprised by bitcoin's delayed reaction but is "cautiously long."

"Traditional 'stores of value' are eroding slowly. Commercial real estate and local U.S. banks were always considered safe assets to store wealth," prominent digital asset and venture capital investor Dan Tapiero posted on X. "There were few alternatives...gold, art, equity, bonds etc. Bitcoin will be our new tech-enabled world store of value."