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Bitcoin drops below $70,000, erasing post-Trump rally

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Bitcoin slid below the $70,000 mark on Thursday, extending a sharp selloff that has erased gains made since Donald Trump’s 2024 election victory. The world’s largest cryptocurrency fell as much as 3.8% to $69,858, its lowest level since November 2024.

Bitcoin is down nearly 8% this week and almost 20% so far this year. Ethereum also weakened, slipping close to 2% to around $2,090 and posting year-to-date losses of roughly 30%.

Analysts said the latest leg down was triggered by concerns over the nomination of Kevin Warsh as the next chair of the Federal Reserve. Warsh is viewed as favoring a smaller central-bank balance sheet, a stance seen as negative for liquidity-sensitive assets such as cryptocurrencies.

“The market fears a hawk with him,” said Manuel Villegas Franceschi of Julius Baer, noting that reduced liquidity would offer little support for digital assets.

The global crypto market has lost about $1.9 trillion in value since peaking in October, according to CoinGecko, with institutional investors pulling billions from exchange-traded funds. Analysts at Deutsche Bank said persistent ETF outflows point to waning interest among traditional investors.

Bitcoin’s decline has also tracked weakness in technology stocks, as fears of AI-driven disruption ripple through markets. Jefferies warned that further price drops could pressure crypto miners and risk forced liquidations, amplifying volatility.

AI-Simulated Fed Meeting Shows Political Pressure Polarises Policymakers

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A new study from George Washington University has used AI agents modeled on Federal Reserve policymakers to simulate a July 2025 FOMC meeting — and the results suggest that political pressure can fragment decision-making even inside the central bank.

The research, by Sophia Kazinnik and Tara Sinclair, programmed AI agents with each policymaker’s historical stances, biographies, and speeches, then fed them real-time economic data and financial news. The AI-driven board reached decisions much like the real FOMC — but when political scrutiny was introduced, dissent increased and consensus eroded.

“This simulation shows that the Federal Reserve is only partially insulated from politics,” the authors wrote. “Outside scrutiny can shape internal decision-making, even in an institution guided by formal rules.”

Central Banks Turn to AI

While no central bank is ready to let AI set monetary policy, many are adopting the technology to improve analysis and efficiency:

  • Federal Reserve: researched generative AI to analyze FOMC minutes.

  • European Central Bank: uses machine learning to forecast euro-area inflation.

  • Bank of Japan: applies AI to economic analysis; its 2023 study used large language models to track price drivers shifting from raw materials to labor costs.

  • Reserve Bank of Australia: testing AI tools that summarize policy-related questions, though Governor Michele Bullock stressed the tech is for analysis, not policymaking.

A Bank for International Settlements (BIS) report in April noted AI’s “strategic importance” but said most central banks remain in the early adoption phase, citing governance and data quality as key hurdles.

The Fed simulation underscores both the promise and perils of applying AI to policymaking: while powerful at capturing complex dynamics, it also exposes how political forces might destabilize even rule-bound institutions.

Bitcoin Hits Record High Amid Fed Easing Bets and U.S. Crypto Reforms

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Bitcoin reached a fresh all-time high on Thursday, climbing as much as 0.9% to $124,002.49 in early Asia trading, surpassing its previous peak from July. Ether, the second-largest cryptocurrency, also hit $4,780.04, its highest level since late 2021.

The rally is being fueled by growing expectations of Federal Reserve rate cuts, sustained institutional buying, and recent U.S. regulatory reforms under President Donald Trump. “Technically, a sustained break above $125k could propel BTC to $150,000,” noted IG market analyst Tony Sycamore.

Bitcoin has surged nearly 32% so far in 2025, supported by long-awaited regulatory wins, including stablecoin legislation and efforts by U.S. securities regulators to accommodate cryptocurrencies. Trump, who has branded himself the “crypto president,” has also promoted the inclusion of crypto assets in 401(k) retirement accounts through a recent executive order.

The executive order could boost asset managers such as BlackRock and Fidelity, which offer crypto exchange-traded funds (ETFs), although crypto’s higher volatility compared with traditional stocks and bonds presents risks for retirement savings.

The broader crypto market has also benefited, with total market capitalization rising to over $4.18 trillion, up from roughly $2.5 trillion in November 2024, following Trump’s election. The sector has shrugged off broader economic uncertainties, including the potential impact of tariffs, as enthusiasm grows for mainstream adoption.