Bitcoin sank below the critical $70,000 threshold on Thursday, extending a sharp selloff that has erased gains accumulated since the 2024 U.S. election. The world’s largest cryptocurrency fell as much as 3.8% to $69,858, its weakest level since November.
The latest drop caps a bruising week for digital assets. Bitcoin is down nearly 8% over the past seven days and close to 20% for the year, while ether slipped almost 2% to around $2,090, taking its year-to-date losses to roughly 30%.
Analysts point to mounting concerns over U.S. monetary policy as a key trigger. Markets were rattled by the nomination of Kevin Warsh as the next Federal Reserve chair, fuelling fears of a more hawkish stance and a potential reduction in the central bank’s balance sheet.
Cryptocurrencies have historically benefited from abundant liquidity, often rallying when central banks support risk assets. “The market fears a hawk,” said Manuel Villegas Franceschi of Julius Baer, warning that a smaller Fed balance sheet offers no tailwinds for crypto.
The selloff has been severe. The global crypto market has shed nearly $1.9 trillion in value since peaking in early October, according to CoinGecko data, with about $800 billion wiped out in the past month alone as investor sentiment deteriorated.
Institutional demand has also weakened. Deutsche Bank noted that persistent ETF outflows have weighed heavily on prices, with U.S. spot bitcoin ETFs losing more than $3 billion in January, following multi-billion-dollar withdrawals in the prior two months.
Adding pressure, cryptocurrencies have tracked broader losses in technology stocks this week. Strategists warn that further declines could trigger forced liquidations among miners, potentially amplifying volatility and reinforcing a fragile risk backdrop across markets.
