SINGAPORE – Bitcoin is on the verge of breaking below the crucial $70,000 level on Thursday, with the world’s biggest cryptocurrency showing no signs of letting up.
Bitcoin fell more than 3% in Asian trading to $70,052.38, its lowest since November 2024.
Ether, the world’s second-largest cryptocurrency, similarly fell nearly 2% to $2,086.11. This is the first time the stock has fallen below $2,000 since May last year.
The recent crypto sell-off has been steep and fast, and analysts say it was triggered by the nomination of Kevin Warsh to be the next Federal Reserve Chairman on hopes that he could shrink the Fed’s balance sheet.
Bitcoin is already down more than 7% this week, taking its annual loss to date to nearly 20%, while Ethereum is down nearly 30% this year.
Cryptocurrencies tend to appreciate while the Fed provides liquidity to money markets and supports speculative assets, and has been widely seen as a beneficiary of large balance sheets.
“The market is afraid of the hawks against him,” said Manuel Villegas Franceschi of Julius Baer’s Next Generation research team. “Balance sheet shrinkage is not a tailwind for cryptocurrencies.”
To be sure, cryptocurrencies have struggled in the months since last October’s record crash, which saw leveraged positions leaked and Bitcoin plummeted from all-time highs.
As a result, investor interest in digital assets has cooled and sentiment towards the industry has become fragile.
“We believe this broad decline is primarily driven by large withdrawals from institutional ETFs, from which billions of dollars have been flowing out every month since the October 2025 recession,” Deutsche Bank analysts said in a note to clients.
They added that U.S. Spot Bitcoin ETFs saw outflows of more than $3 billion in January, following outflows of approximately $2 billion and $7 billion in December and November, respectively.
“In our view, this steady sell-off indicates traditional investors are losing interest and overall pessimism towards cryptocurrencies is increasing,” the analysts said.
(Reporting by Rae Wee; Editing by Edwina Gibbs)
