Trump’s nomination of Kevin Warsh as Federal Reserve chair triggers a sharp crypto selloff, with Bitcoin tumbling below $78,000 and broader digital assets extending losses amid stronger dollar and higher rate expectations
Bitcoin slumped to a 10-month low over the weekend after US President Donald Trump nominated Kevin Warsh as the next chair of the Federal Reserve, triggering a reassessment of the interest-rate outlook and a sharp pullback from risk assets, including cryptocurrencies.
The world’s largest cryptocurrency fell below the $78,000 mark on Saturday, touching around $77,900 — its weakest level since April and close to levels last seen around Trump’s election victory in 2024. Bitcoin had traded near $84,000 on Friday, but slid more than 7 per cent in 24 hours as markets digested the implications of Warsh’s nomination.
By Monday morning in New York, Bitcoin had steadied slightly, rising about 1.4 per cent to hover just below $77,500, after having dropped nearly 10 per cent over the weekend.
Hawkish Fed fears rattle markets
The selloff followed Trump’s decision to tap Warsh, a former Federal Reserve governor widely seen as a monetary policy hawk, to succeed Jerome Powell when his term ends in May. Warsh has long advocated monetary discipline and has signalled support for tighter financial conditions to contain inflation.
Analysts say that stance has direct implications for crypto markets, which have thrived in periods of abundant liquidity and low real interest rates.
Markus Thielen, founder of 10x Research, told CoinDesk that Warsh’s “emphasis on monetary discipline, higher real rates, and reduced liquidity frames crypto not as a hedge against debasement but as a speculative excess that fades when easy money is withdrawn.”
Expectations that US rates could stay higher for longer — or that liquidity could tighten further — prompted investors to rotate out of riskier assets such as cryptocurrencies and into safer instruments, boosting the US dollar. The greenback posted its largest gain since May after the nomination news, compounding pressure on digital tokens and precious metals alike.
Ether, altcoins slide
The weakness was broad-based across the crypto complex. Ether fell around 4 per cent on Monday and remains down sharply over the past week. Major tokens including BNB, XRP and Solana have each declined at least 10 per cent over the last seven days, reflecting widespread risk aversion.
Bitcoin has now shed nearly 11 per cent in January, marking its fourth straight monthly decline — the longest losing streak since the 2018 crash that followed the initial coin offering boom. From its October peak of $126,198, the cryptocurrency has plunged about 40 per cent.
The rout also triggered heavy liquidations in derivatives markets. Data from Coinglass showed that nearly $590 million in bullish crypto bets were wiped out in a 24-hour span during the weekend selloff.
Gold volatility adds to cross-asset stress
The crypto slump has unfolded alongside heightened volatility in other asset classes. Gold, which earlier last week had surged to a record above $5,300 an ounce, retreated sharply after Warsh’s nomination and a rebound in the US dollar. The metal suffered its steepest drop in more than a decade at the end of last week before extending losses on Monday.
Market participants say the correlation between crypto and broader risk assets has strengthened in recent months.
“The underlying sentiment remains bearish in the short term. Crypto is tracking overall asset markets and not moving in isolation,” Damien Loh, chief investment officer at Ericsenz Capital, told Bloomberg News. He expects Bitcoin to find a near-term low in the $70,000–$74,000 range, with potential upside capped near $90,000.
Joel Kruger, markets strategist at LMAX Group, told Bloomberg News the recent drawdown is bringing prices closer to technically attractive levels. Bitcoin could find “strong support” around $70,000, he said. However, a sustained break below the 2021 highs near that level would represent a damaging hit to long-term investor confidence, warned Caroline Mauron, co-founder of Orbit Markets.
Warsh’s nuanced crypto stance
Ironically, Warsh has previously spoken favourably about Bitcoin, describing it in a 2021 interview as the “new gold” for younger investors. As recently as July 2025, he said the cryptocurrency did not make him nervous and was “getting new life as an alternative currency.”
Yet markets appear more focused on his broader monetary philosophy than his personal views on digital assets. With inflation concerns lingering and global markets unsettled by trade tensions and shifting rate expectations, investors are bracing for tighter financial conditions under a Warsh-led Fed.
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