The news: The price of a basket of cryptocurrencies has declined 25% in the past month—including a 24% drop in the price of Bitcoin—and fallen precipitously since the market peak in October. It is perceived that the market has entered a new crypto winter: Prices and popularity fall, trading volume drops, and pessimism rises.

Why it’s worth watching: Cryptocurrency investments have quietly become accepted and encouraged by some demographics and large, traditional financial institutions (FIs). For example, Gen Zers favor alternative assets, including crypto—and 65% plan to invest more in it. Among FIs:

• Fidelity has made a massive push over the past few years into crypto trading and custody for retail investors.
• Bank of America is making crypto-based investments easily available through its brokerage services and recommending clients allocate funds to them.
• Charles Schwab has imminent plans to offer spot bitcoin and ether trading. It already offers investments in exchange-traded products that invest directly in crypto.

Zoom out: Stablecoins took center stage in 2025, with the passage of a law regulating the market. We predicted in our December 2025 report Payments Trends to Watch in 2026 that the industry would lay the groundwork for stablecoin payments—and that is indeed coming to pass. A bill that the Senate is currently debating is designed to clarify federal oversight of the crypto market.

Implications for banks: If the crypto bill becomes law, the federal government will legitimize crypto as a “normal” asset, and more conservative FIs will be able to enter the market with less regulatory risk. FIs should be mindful of the crypto implosion in 2022, which was the consequence of unclear or no regulation as much as it was an unsustainable rise in crypto prices. A crypto winter should no longer be a systemic risk to itself, and FIs that follow the rules and manage risk responsibly should feel free to enter the market.