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 downward trend of Bitcoin continues. Following the nomination of former Federal Reserve (Fed) Governor Kevin Warsh as a candidate for the next Fed Chair, the $80,000 level collapsed and Bitcoin fell as low as $75,000. In addition, a variety of factors are collectively exerting downward pressure. In the domestic market, trading volume continues to decline, leading to the outlook that a short-term rebound will not be easy.

According to CoinMarketCap, a global cryptocurrency market tracker, Bitcoin was trading at $76,440.43 as of 4:00 p.m. on February 2, down 2.28% from 24 hours earlier. During the session, it even dropped to the $74,000 range.

The fall below the $80,000 level was largely influenced by the nomination of the next Fed Chair. Kevin Warsh, who is considered relatively hawkish (favoring monetary tightening), was nominated, which led to a sharp drop in gold and silver prices, and Bitcoin also declined in tandem. Hong Sungwook, a researcher at NH Investment & Securities, analyzed, "Warsh, the new Fed Chair nominee, holds the view that the Fed's balance sheet should be reduced, arguing that this would create more room for additional rate cuts." He continued, "On the surface, rate cuts are expected to proceed as anticipated, but the reduction of the Fed's assets as a trade-off is negative for Bitcoin, for which liquidity is crucial to investor sentiment." He added, "The expansion of the Fed's assets through quantitative easing and the resulting debasement (currency dilution effect) have been core investment points for Bitcoin, so the diminished expectations in this regard have contributed to the weakness."

In addition to the Warsh shock, various other factors have also combined 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, "Last month, Bitcoin exceeded the $97,000 level on expectations for the passage of the Clarity Act in the US and news of additional Bitcoin purchases by Strategy, but at the end of the month, geopolitical risks, delays in the passage of the Clarity Act, weakness in tech stocks, and the nomination of the next Fed Chair all combined to weaken investor sentiment."

The retreat of policy expectations is also cited as a factor in Bitcoin's weakness. Researcher Hong Sungwook said, "It is no exaggeration to say that since 2023, Bitcoin's price has been driven by US institutionalization events. In June 2023, BlackRock's application for a spot Bitcoin ETF, the approval of spot Bitcoin ETFs in January 2024, Donald Trump's election as US President in November 2024, and the passage of the Genius Act in 2025 all led to stepwise increases in Bitcoin's price. However, since the Genius Act, there have been no major institutionalization events, which has reduced market interest and negatively affected the price." He added, "Despite President Trump's urging, the lack of progress on the Clarity Act is also raising questions about the momentum of policy initiatives."

Meanwhile, in the domestic market, while the stock market remains strong, Bitcoin continues to underperform, resulting in declining trading volumes. According to CoinGecko, a cryptocurrency information provider, as of 2:30 p.m. the previous day, the 24-hour trading volume on Upbit, the largest domestic cryptocurrency exchange, was $2.91935 billion (approximately 4.26 trillion won), ranking 27th globally. Upbit, which until last year boasted the third or fourth largest trading volume in the world after Binance and others, has recently fallen outside the top 20. The combined 24-hour trading volume of the five major won-based cryptocurrency exchanges in Korea (Upbit, Bithumb, Coinone, Korbit, and Gopax) was only in the 6 trillion won range. In December 2024, the monthly trading volume of the five major domestic cryptocurrency exchanges reached about 541 trillion won, nearly double the combined total of the KOSPI and KOSDAQ stock markets. However, as the stock market regained strength last year, the trading volume of the two markets reversed, and recently, the trading volume of cryptocurrencies has shrunk to about one-tenth that of the stock market.

Due to deteriorating investor sentiment, a rebound is not expected to come easily in the near term. Hong Jinhyun, a researcher at Samsung Securities, said, "With the market already in a correction phase, the Fed's decision to keep rates unchanged and heightened geopolitical risk aversion have led to a clear preference for avoiding risk assets, resulting in a sharp correction in the cryptocurrency market." He continued, "Large-scale liquidations occurred in the futures market, and in the options market, key resistance levels and open interest rapidly shrank, leading to increased volatility. As investor sentiment remains negative, it is difficult to judge this as a short-term bottom, and a conservative positioning is required in the current phase."