Bitcoin plunged to the 70,000 USD range on Monday, with the price of Bitcoin and other cryptocurrencies displayed on the status board at the Bithumb Lounge Gangnam Main Branch in Seocho-gu, Seoul 2026.2.2 / News1

The nomination of Donald Trump's pick for Federal Reserve chair has sent shockwaves through the cryptocurrency market, despite Trump's self-proclaimed title as the crypto president. The selection of a cautious figure regarding interest rate cuts has heightened investors' aversion to risk assets.

Over the weekend, the global cryptocurrency market saw a staggering 360 trillion KRW (about 248 billion USD) evaporate, triggering a sharp decline in major cryptocurrency prices.

As of 10:16 a.m. (South Korean time) on Monday, the total market capitalization of cryptocurrencies stood at 2.6 trillion USD, an 8.7% decrease from January 31. This massive sell-off wiped out about 250 billion USD in just a few days.

Major cryptocurrencies experienced significant price drops. Bitcoin (BTC), which was trading in the 84,000 USD range on January 31, fell below 80,000 USD and briefly touched 75,000 USD on Monday.

Ethereum (ETH) traded at 2,301 USD, down 5.62% from the previous day, retreating to levels last seen in June. XRP plummeted to 1.60 USD, revisiting price points from November 2024 during Trump's previous presidential campaign.

Solana (SOL) is teetering on the brink of falling below 100 USD, a level not seen since January 2024.

Analysts attribute the sharp contraction in the crypto market to Trump's Fed chair nomination. The selection of a hawkish figure, known for caution on interest rate cuts, quickly dampened expectations for monetary easing and soured sentiment towards risk assets.

On January 30, Trump tapped former Fed governor Kevin Warsh to succeed Jerome Powell as Fed chair. Warsh is known for his hawkish stance, consistently advocating for price stability and tighter monetary policy during his tenure at the Fed.

Trump lauded Warsh's nomination on social media, stating that he's thrilled to nominate Warsh as Fed chair. Trump is confident he'll go down in history as the best Fed chair ever.

Some market observers argue that Trump's push for cryptocurrency development is creating confusion. Despite branding himself as the crypto president since before the 2024 election and recently reaffirming his vision to make the U.S. the crypto capital at the World Economic Forum, his Fed chair pick seems at odds with this stance.

Markus Thielen, founder of 10x Research, noted that Warsh emphasizes real interest rate hikes and liquidity tightening. He views cryptocurrencies as speculative assets that could vanish in a higher interest rate environment.

Renaissance Macro Research added that Warsh has consistently advocated for hawkish monetary policy, even during labor market instability. His current dovish rhetoric may be merely tactical.

However, Trump's continued pressure for interest rate cuts adds uncertainty to the Fed's future policy direction. On January 29, Trump criticized Powell on Truth Social, saying that there's absolutely no reason for the U.S. to maintain such high interest rates.

He argued that thanks to tariffs, vast sums are flowing into the U.S. It should have the world's lowest interest rates. Powell is costing America hundreds of billions annually in unnecessary interest expenses.

The nomination of Donald Trump's pick for Federal Reserve chair has sent shockwaves throug …

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