BITCOIN, the world’s largest cryptocurrency by market value, was trading at US$78,719.63 at 12:48 p.m. ET (17:48 GMT) on Saturday, down 6.53 per cent as it extended losses from the previous session.
Reuters cited that on Friday, the digital currency tumbled to US$81,104, marking its lowest level since 21 November, as the U.S. dollar strengthened following the announcement that former Federal Reserve Governor Kevin Warsh would be the next Fed chair. Some investors and traders fear his leadership could result in tighter monetary conditions.
Warsh has publicly called for a “regime change” at the central bank, including proposals to shrink the Fed’s balance sheet.
Cryptocurrencies, including bitcoin, have historically benefited from a large balance sheet, rallying when the Fed has pumped liquidity into financial markets, providing support for speculative assets.
Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said the Fed’s “bloated balance sheet combined with heavy-handed bank regulation” has trapped liquidity on Wall Street rather than allowing it to flow to Main Street. He added that this dynamic has helped fuel bubbles in bonds, cryptocurrencies, metals, and meme stocks.
Ether, the second-largest cryptocurrency, also fell sharply, losing 11.76 per cent to trade at $2,387.77 on Saturday afternoon. Cryptocurrencies have struggled to find direction since last year’s sell-off, lagging behind the strong rallies in gold and traditional equities.
Jacobsen noted that “sometimes these price adjustments feed on themselves,” observing that Friday’s abrupt drop had reminded investors of the risks. He said it was “possible, if not likely, that we see more selling over the next few days.”
Market-leading bitcoin has lost roughly a third of its value since hitting record highs in October last year, a sobering reversal for an asset once expected to benefit from a golden era of inflows and accommodating regulation under former President Donald Trump. - February 1, 2026
