Bitcoin Plunges Below $80,000 on 'Warsh Shock'... "More Headwinds Ahead" [Bitcoin Now]

Collapse of the $80,000 Mark Pushes Bitcoin Down to $75,000
"Warsh Shock" Triggers Drop Alongside Gold and Silver
Weakened U.S. Policy Expectations and Geopolitical Risks Add Pressure
"Volatility Is Rising... Further Declines Possible"

The decline in Bitcoin is continuing. Following the nomination of former Federal Reserve (Fed) Governor Kevin Warsh as a candidate for the next Fed Chair, the 80,000-dollar level collapsed and the price fell to the 75,000-dollar range. In addition to this, multiple factors are acting together to create downward pressure. In the domestic market, trading volume is steadily decreasing, leading to the outlook that a rebound in the short term will not be easy.

According to global virtual asset market data site CoinMarketCap, as of 4:00 p.m. on the 2nd, Bitcoin was trading at 76,440.43 dollars, down 2.28% from 24 hours earlier. During intraday trading that day, it even fell to the 74,000-dollar range.

The collapse of the 80,000-dollar level was largely driven by the nomination of the next Fed Chair. With Kevin Warsh, who is classified as relatively hawkish (favoring monetary tightening), being nominated, gold and silver prices plunged, and Bitcoin also fell in tandem. Hong Sungwook, a researcher at NH Investment & Securities, analyzed, "The newly nominated Fed Chair candidate Warsh believes that the Fed's balance sheet should be reduced and argues that this would create room for additional cuts to the policy rate," adding, "On the surface, rate cuts will proceed as expected, but the reduction of Fed assets as a trade-off is negative for Bitcoin, where liquidity is a key driver of investment sentiment." He added, "Expansion of the Fed's assets through quantitative easing and the resulting debasement effect have been core investment points for Bitcoin, so diminished expectations on this front have contributed to the weakness."

Beyond the 'Warsh shock', various other factors have also acted in combination to exert downward pressure on Bitcoin. According to Kiwoom Securities, Bitcoin fell 10.8% in January alone. Sim Subin, a researcher at Kiwoom Securities, explained, "On expectations for passage of the U.S. Clarity Act and news of additional Bitcoin purchases by Strategy, Bitcoin exceeded the 97,000-dollar level last month, but toward the end of the month, geopolitical risks, delays in passage of the Clarity Act, weakness in tech stocks, and the addition of the next Fed Chair nomination all weighed on sentiment."

Fading policy expectations are also cited as one of the reasons for Bitcoin's weakness. Researcher Hong Sungwook said, "It is no exaggeration to say that since 2023, Bitcoin's price has been driven by U.S. institutionalization events," adding, "Around BlackRock's application for a spot Bitcoin exchange-traded fund (ETF) in June 2023, the approval of spot Bitcoin ETFs in January 2024, the election of U.S. President Donald Trump in November 2024, and the passage of the Genius Act in 2025, Bitcoin prices each moved up a notch. However, after the Genius Act, the absence of major institutionalization events has dampened market interest and negatively affected prices." He continued, "Despite President Trump's urging, the lack of meaningful progress on the Clarity Act is also raising doubts about the administration's policy drive."

Meanwhile, in the domestic market, while the stock market remains strong, Bitcoin continues to show weak performance and trading value is shrinking. According to virtual asset information provider CoinGecko, as of 2:30 p.m. the previous day, 24-hour trading value on Upbit, the largest virtual asset exchange in Korea, stood at 2,919.35 million dollars (about 4.26 trillion won), ranking 27th in the world. Until last year, Upbit boasted the third- to fourth-largest trading volume globally after Binance and others, but it has recently fallen out of the top 20. The combined 24-hour trading value of the five major won-based virtual asset exchanges in Korea (Upbit, Bithumb, Coinone, Korbit, and Gopax) was only in the 6-trillion-won range. In December 2024, the monthly trading value of the five major domestic virtual asset exchanges reached about 541 trillion won, nearly twice the combined total of the KOSPI and KOSDAQ markets. However, as the stock market regained strength last year, trading volumes in the two stock markets overtook those of virtual assets, and recently the virtual asset market has shrunk to about one-tenth the size of the stock market in terms of trading value.

With deteriorating investor sentiment, a rebound is not expected to come easily in the near term. Hong Jinhyun, a researcher at Samsung Securities, said, "The virtual asset market has already entered a correction phase, and as the Fed kept its policy rate unchanged and geopolitical risk aversion intensified, risk-off sentiment became pronounced, leading to a sharp correction in virtual assets," adding, "In the futures market, large-scale liquidations occurred, while in the options market, major price bands and open interest contracted rapidly, amplifying volatility. Investor sentiment remains negative, so it is difficult to view current levels as a short-term bottom, and a conservative positioning is warranted at this stage."