Crypto Stocks Drop Up to 7% as Fed Chair Pick Fuels Selloff

Edgen Crypto

·Feb 02 2026, 11:58

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Key Takeaways

U.S. crypto-related equities declined sharply in pre-market trading on February 2, as investors reacted to the nomination of Kevin Warsh for Federal Reserve chair. The move triggered a broad selloff in digital assets over the weekend, though Bitcoin has since stabilized near $77,000.

Publicly-traded crypto firms saw significant pre-market losses, with Galaxy Digital (GLXY) falling over 7% and MicroStrategy (MSTR) dropping more than 6%.
The market downturn followed President Donald Trump's Friday nomination of Kevin Warsh for Federal Reserve chair, which sparked a weekend crypto selloff.
Bitcoin recovered slightly to trade near $77,000 after dipping to $74,500 on Saturday, while the S&P 500 Volatility Index (VIX) climbed 10%, signaling rising uncertainty.

Crypto Equities Fall Over 7% on Fed Nomination

U.S. crypto-related stocks fell in pre-market trading on February 2, extending a selloff sparked by President Donald Trump's nomination of Kevin Warsh for Federal Reserve chair. The market interpreted the choice as a potentially hawkish shift, putting pressure on risk assets. Galaxy Digital (GLXY) led the losses, dropping more than 7%, while MicroStrategy (MSTR), the largest corporate holder of bitcoin, declined over 6%.

Other companies in the sector also faced significant selling pressure. Crypto exchange Coinbase (COIN) fell by approximately 4%. Bitcoin mining and AI-related firms IREN (IREN) and Cipher Mining (CIFR) both lost around 4%, reflecting broad investor retreat from crypto-exposed equities.

Bitcoin Stabilizes Near $77,000 as Volatility Spikes 10%

While crypto stocks fell, Bitcoin itself showed signs of stabilization. The digital asset rose about 1% to trade near $77,000 after falling to a low of $74,500 on Saturday. This modest recovery coincided with a slight weakening of the U.S. Dollar Index (DXY), which pulled back to 97, reinforcing a recently observed inverse correlation between Bitcoin and the dollar.

Despite Bitcoin's stabilization, broader market anxiety increased. The S&P 500 Volatility Index (VIX) climbed 10%, and the Volmex implied volatility index rose from 40 to 50 over the past week, indicating traders are pricing in larger future price swings. Other risk assets also came under pressure, with gold and silver both falling 4%, and West Texas Intermediate crude oil futures declining 5% to $62 a barrel.