U.S. Regional Banks Face Renewed Stress, Bitcoin Seen as “Smelling Trouble”

Several regional banks in the United States are showing fresh signs of financial strain, raising concerns that the 2023 banking crisis may be resurfacing. Despite efforts to strengthen balance sheets and restore confidence, new loan write-offs and falling stock prices are once again rattling investors. 

Some in the crypto industry believe Bitcoin could benefit if another liquidity crunch emerges.

Banks Face Signs of Stress

Jack Mallers, CEO of Strike, argued that Bitcoin’s recent market movements reflect growing awareness of a looming liquidity crisis. Speaking on the Primal social platform on Friday, he said, “Bitcoin is accurately smelling trouble right now. The U.S. is going to have to inject some of that sweet, sweet liquidity soon and print a ton of money, or else their fiat empire goes kaboom.”

Taking the discussion to X, Mallers added, “Bitcoin is the most sensitive to liquidity. It moves first. It’s a truth machine.” He noted that rising bond yields, widening credit spreads, and renewed pressure on banks all signal systemic weakness. “When they’re forced to print, it’ll move first again and outperform everything,” he wrote.

Analysts suggest that the March 2023 regional bank crisis was never fully resolved but merely masked by government bailouts and forced acquisitions. This, critics say, created a moral hazard, as banks continued risky behavior knowing deposits were implicitly guaranteed beyond FDIC insurance limits.

Market Jitters and Bitcoin’s Price Reaction

Concerns resurfaced this week after Zions Bank and Western Alliance reported bad commercial loans, sending their shares tumbling and sparking fears of contagion. As the Associated Press noted, confidence in regional banks has never fully recovered, and Wall Street remains wary of deeper balance-sheet problems.

Despite the narrative that Bitcoin could thrive in a liquidity crisis, its recent price action tells a different story. BTC fell to a four-month low of $103,850 on Friday, losing over $5,000 in hours before rebounding slightly to around $106,800 at the time of writing. The coin remains down more than 15% from its all-time high.

BitMEX co-founder Arthur Hayes commented on X, “BTC on sale. If this U.S. regional banking wobble grows into a crisis, be ready for a 2023-style bailout. And then go shopping if you have spare capital.”

For now, Bitcoin’s “trouble radar” may be flashing , but investors are still waiting to see whether history will repeat itself.