Bitcoin Slumps to Two-Month Low Amid Warsh Fed Nomination and ETF Outflows
Bitcoin faces renewed pressure as markets digest Fed Chair pick.
Bitcoin continues to struggle in early 2026, trading near two-month lows following President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair. The cryptocurrency dipped as much as 4% to around $81,000 before recovering slightly to hover near $84,000 levels. This pullback comes amid broader risk-off sentiment in financial markets, with stocks declining and the US dollar strengthening slightly. Investors had anticipated the announcement might spark optimism for lower rates, but Warsh’s establishment background and past hawkish views have left the crypto community cautious about future policy direction.
The nomination has failed to provide the expected boost, as Warsh, a former Fed Governor, is seen as potentially measured on rate cuts despite recent alignment with pro-growth stances. Analysts note that persistent ETF outflows are compounding the pressure. US spot Bitcoin ETFs have experienced three consecutive months of net redemptions, with billions drained since late 2025. Recent data shows significant daily outflows, including hundreds of millions in a single session, marking one of the longest streaks of withdrawals since the products launched in 2024. This institutional selling has eroded confidence, pushing Bitcoin down over 30% from its late-2025 peak.
Compounding the malaise, over $1 billion in bullish positions across cryptocurrencies were liquidated in the past day, highlighting leveraged traders’ vulnerability. Bitcoin’s performance starkly contrasts with surging traditional safe-havens like gold, raising questions about its “digital gold” narrative. As investors flock to precious metals amid geopolitical and policy uncertainties, Bitcoin appears to behave more like a risk asset tied to tech stocks rather than an inflation hedge.
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Experts warn of further downside if key supports fail. Some predict a potential slide toward $70,000-$80,000 if bearish momentum persists into lower-liquidity weekend trading. However, positive notes include Binance’s plan to convert its $1 billion SAFU emergency fund from stablecoins to Bitcoin over the next month, signaling long-term confidence from major players.
As the market awaits clarity on Warsh’s confirmation and Fed trajectory, Bitcoin remains range-bound between roughly $82,000 and $90,000. Traders are watching for stabilization, but the combination of policy uncertainty and sustained outflows suggests near-term challenges ahead for the leading cryptocurrency.
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