Cryptocurrency markets plunged this week — to the dismay of crypto bros everywhere — with Bitcoin reaching two-month lows of just over $81,000 before leveling out around $84,000 by Friday afternoon.
Trump’s recent controversial pick for Federal Reserve chair seemingly did little to reassure already spooked investors, as the S&P 500 and Nasdaq futures continued to tumble on Friday.
His appointment of Kevin Warsh, a former central bank governor, to head the Fed left plenty of questions unanswered. Would he bow to Trump’s desires of lowering interest rates, or would his background imply a much more careful approach?
To many investors, the uncertainty proved too much, causing the value of major digital currencies to slide this week as crypto bets — which tend to be far more risky than other investments — were liquidated.
And, as Coindesk reports, experts are now suggesting it’s only the beginning of a prolonged crypto downturn.
“The technical levels have all been taken out on the downside, and I don’t see much support here for Bitcoin,” Hilbert Group chief investment officer Russell Thompson told the outlet, predicting a drop as low as $70,000, and calling getting in on the dip a “general risk move.”
Crypto research strategist Matt Mena also predicted a drop to as low as $75,000, but still expected Bitcoin to eventually rally to $100,00 once again by the end of the quarter.
Warsh’s nomination hasn’t exactly landed as a rallying cry in crypto circles.
“Markets generally view a resurgence of Warsh’s influence as bearish for Bitcoin, as his 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liquidity frames crypto not as a hedge against debasement but as a speculative excess that fades when easy money is withdrawn,” 10x Research founder Markus Thielen told CoinDesk in a separate story.
Bitcoin exchange-traded funds, a type of crypto investment fund that’s traded on stock exchanges, have been hit particularly hard, with the top 12 ETFs recording three consecutive months of net outflows, as Bloomberg reports, the first time that’s happened since they were launched in 2024.
“I wouldn’t be shocked to see BTC trade in the $70,000 range soon,” Kaiko research analyst Adam McCarthy told the outlet.
Despite the largely gloomy predictions, nobody knows what will happen to the infamously unpredictable and volatile digital token in the long term.
For one, the value of gold and silver, which had risen as anxiety heightened over Trump’s Federal Reserve chair nomination, plummeted today. To some, it was a sign that investors were relieved that the bank would retain its independence from the chaotic Trump administration with Walsh’s appointment.
For now, the Bitcoin liquidation appears to have levelled off, but concerns over the start of the next “crypto winter” are still having investors on edge, making getting in on a considerably reduced price a risky bet — just as it has always been.
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