The cryptocurrency market sharply declined after retail investors assessed high volatility throughout the past week, driven by fluctuations in commodity markets and close attention to President Donald Trump's announcement regarding the new Federal Reserve (Fed) Chair nominee.
On Monday morning, 2 February, Thailand time, Bitcoin, the world's largest cryptocurrency by market value, fell below $75,000, down nearly 5% over the past 24 hours (according to CoinMarketCap). Meanwhile, Ethereum dropped over 10% to $2,177.68, and Solana also fell sharply to $96.52.
This sell-off in the cryptocurrency market followedPresident Donald Trump’s announcement nominating Kevin Warsh as the new Fed Chair.This decision supported a stronger US dollar by easing market concerns about the Federal Reserve’s independence.
However,a stronger US dollar typically negatively affects Bitcoin,as it reduces cryptocurrencies’ appeal as alternative currencies in investors’ eyes.
If confirmed by the US Senate, Kevin Warsh will replace Jerome Powell, whose term ends in May. Over recent years, Trump has frequently criticized Powell, especially for the Fed’s reluctance to cut interest rates as Trump desired since Powell took office in 2018.
This cryptocurrency market correction represents the latest shock to retail investors after they hadfaced severe volatility in precious metals markets, particularly silver.
Last Friday, Spot Silver prices plunged dramatically, marking the worst day for the market since March 1980. Spot Silver dropped 28% to $83.45 per ounce, near the day’s low, while Silver Futures tumbled even more, falling 31.4% to close at $78.53.
These developments reflect the current fragility of global financial markets, where investors confront monetary policy uncertainties, volatile US dollar movements, and simultaneous sell-offs in multiple risky asset markets.
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