The cryptocurrency market faces turbulence as Bitcoin, the world’s leading digital currency, teeters near a critical $70,000 threshold. On Thursday, the currency dipped over 3% to $70,052.38, marking its lowest point since November 2024, as it showed no signs of halting its decline.
Ethereum, meanwhile, the second-largest cryptocurrency, fell by nearly 2%, to $2,086.11. Analysts suggest the latest downturn, which could see Ethereum fall below $2,000 for the first time since last year, is driven by the nomination of Kevin Warsh as the new Federal Reserve Chair, who might reduce the Fed’s balance sheet.
This has unsettled the market, which had thrived on the Fed’s liquidity provisions. With Bitcoin’s value plunging 7% this week and 20% this year, while Ethereum is down nearly 30%, concerns are mounting. Some attribute these losses to massive institutional withdrawals from crypto ETFs, with Deutsche Bank reporting over $3 billion in outflows in January alone, signaling traditional investors’ waning interest in digital assets.