Bitcoin fell to $75,000 over the weekend, down over 40% from its all-time high of roughly $126,000 reached in early October. The sell-off came amid renewed uncertainty around Fed policy and risk sentiment across crypto markets.
In a recent Schwab Network segment, analyst Adam Lynch and host Jenny Horne discussed what’s driving Bitcoin’s decline and why Trump’s nomination of Kevin Warsh as the next Fed Chair could shift the outlook for crypto investors.
Who Is Kevin Warsh and Why Should You Care?
President Trump nominated Warsh, a former Fed Board of Governors member who served under Ben Bernanke from 2006 to 2011, to replace Jerome Powell after his term ends in May. The pick came as a surprise, as BlackRock’s Rick Rieder had been the early favorite.
Warsh has historically been seen as a hawk, but his recent stance has leaned more dovish. Robin Brooks at the Brookings Institution expects Warsh to cut rates aggressively, projecting around 100 basis points in cuts over his first four meetings.
“He can’t be and he won’t be [hawkish] because his worst nightmare is probably to have Trump on him the way he was on Powell,” Brooks noted, as cited by Lynch.
His confirmation does face one hurdle. Senator Tom Tillis (R) has said he will oppose any nomination until the Fed’s investigation into Jerome Powell is resolved, though most expect this to be cleared by May.
A 40% Bitcoin Drop
Bitcoin started 2026 at around $88,000, briefly hit $95,000, then began its most recent decline in mid-January. It now trades well below its 50-day and 100-day moving averages.
Lynch put the drawdown in perspective. Bitcoin’s volatility runs 3-4x that of equities.
“If you can reasonably expect a 10 to 15% equity market correction in any given year, and you can, a 40% drop in Bitcoin is just as reasonable,” he said.
Is Strategy Drowning?
Strategy disclosed it purchased 855 Bitcoin last week at roughly $88,000, bringing its total holdings to around 713,000 BTC at an average cost of $76,000. With Bitcoin below $75,000, the position is currently in the red.
Canaccord analyst Joseph Vafi cut his price target 61%, from $475 to $185, but maintained a buy rating. He described Bitcoin as being “amid an identity crisis. Still somewhat fitting the profile of a long-term store of value, but increasingly trading like a risk asset in the short term.”
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