Bitcoin, the top cryptocurrency by market value, fell by 6.53% to $78,719.63 at 12:48 p.m. on Saturday, continuing losses from the previous session.
Bitcoin sank to $81,104, its lowest level since November 21, when the U.S. dollar rose after former Fed Governor Kevin Warsh was named Fed chair. Investors and traders worry about a possible cash tightening in the financial system.
Warsh favors Fed regime change and a smaller balance sheet.

Bitcoin and other cryptocurrencies have benefited from a huge balance sheet, rallying while the Fed filled money markets with liquidity, supporting speculative assets.
According to Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, the Fed’s “bloated balance sheet combined with heavy-handed bank regulation” has caused liquidity to remain on Wall Street, fueling bubbles in assets like bonds, crypto, metals, and meme stocks.

Ether sank 11.76% to $2,387.77 Saturday afternoon. Since falling last year, cryptocurrencies have struggled to gain direction, trailing gold and stock rallies.According to Jacobsen, price modifications can have a self-reinforcing effect. Friday’s sharp decline highlighted the concerns. He stated it “possible, if not likely, that we see more ‍selling over the next few days.”

Cryptos face challenges in the once-hoped-for period of favorable regulation under President Donald Trump. Since hitting record highs in October 2018, market leader bitcoin has lost a third of its value.