Bitcoin was on the cusp of breaking below the key $70,000 level on Thursday as a slide in the world’s largest cryptocurrency showed no signs of stopping.

Bitcoin fell 2% in early European trade, having dropped as much as 3.5% earlier during the Asian session to $70,052.38, its lowest level since November 2024.

Ether, meanwhile, was down 0.7% at $2,111.34. A drop below $2,000 would mark the first time the world’s second-largest cryptocurrency has breached that level since May last year.

The latest rout in cryptocurrencies, which has come hard and fast, was triggered, analysts say, by the nomination of Kevin Warsh as the next Federal Reserve Chair, due to expectations he could shrink the Fed’s balance sheet.

Bitcoin has already fallen more than 7% for the week, taking its losses for the year thus far to nearly 20%, while ether is down close to 30% this year.

Cryptocurrencies have widely been regarded as beneficiaries of a large balance sheet, having tended to rally while the Fed greased money markets with liquidity - a support for speculative assets.

“The market fears a hawk with him,” said Manuel Villegas Franceschi from the next generation research team at Julius Baer. “A smaller balance sheet is not going to provide any tailwinds for crypto.”

To be sure, cryptocurrencies have struggled for months since a record crash last October sent bitcoin tumbling from a peak as leveraged positions got washed out.

That has left investors cooling on digital assets, and sentiment towards the industry fragile.

“We believe this broader decline is mainly driven by massive withdrawals from institutional ETFs. These funds have seen billions of dollars flow out each month since the Oct 2025 downturn,” Deutsche Bank analysts said in a note to clients.

They added that US spot bitcoin ETFs witnessed outflows of more than $3 billion in January, following outflows of about $2 billion and $7 billion in December and November, respectively.

“This steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing,” the analysts said.