The Currency analytics
By Steven Anderson
Bitcoin took a beating Sunday. The cryptocurrency plunged below $80,000 for the first time in weeks after Kevin Warsh got tapped as the new Federal Reserve Chair, sparking…
The market didn't waste time reacting to the news. Automated trading systems kicked in hard, unwinding leveraged positions at breakneck speed and piling on the selling pressure.
Warsh isn't exactly crypto's best friend.
The former Fed governor has made his skepticism about digital currencies pretty clear over the years.
Warsh replaces Jerome Powell, who's been running the Fed since 2018. Powell's tenure saw some wild swings in monetary policy, including the massive money printing during COVID…
The carnage wasn't limited to Bitcoin. Ethereum dropped nearly 8% within hours of the announcement, falling below $2,800 for the first time since January.
Bitcoin had been riding high after surging past a $1.5 trillion market cap just last week. Institutional money kept flowing in, with BlackRock's Bitcoin ETF seeing record inflows.
JP Morgan analysts jumped on the story fast. They published a note Sunday evening pointing out Warsh's track record of pushing for stricter oversight of financial innovations.
The Federal Reserve hasn't said much yet about specific policy changes. That's got investors on edge, waiting for any hint about Warsh's plans.
International markets are watching too. The European Central Bank put out a statement Monday saying they're monitoring the situation closely.
Goldman Sachs tried to calm nerves with a research note Tuesday. Their analysts think the market's reaction might be overdone in the short term.
The CFTC is staying quiet for now. A commission official, speaking anonymously, said they're evaluating how Warsh's leadership might affect futures markets, including Bitcoin…
Warsh will officially take over in the coming weeks. His first major policy decision is what everyone's waiting for. Will he crack down on crypto lending?
Some context helps here. Similar crashes happened in 2021 when China banned crypto mining and trading. Bitcoin fell from $65,000 to below $30,000 in a matter of months.
The crypto industry is holding its breath for Warsh's inaugural address. Any hints about regulatory changes could send Bitcoin in either direction.