REUTERS

Bitcoin, the world’s largest cryptocurrency by market value, was down by 6.53 percent at $78,719.63 at ​12:48 p.m. ET (1748 GMT) on Saturday, continuing its decline from the ‌previous session.

On Friday, bitcoin fell to as low as $81,104, the lowest since November 21, while the US dollar gained after former Federal Reserve Governor Kevin Warsh was selected as the next Fed chair. Some investors and ‌traders are concerned he might tighten up on cash in the ​financial system.

Warsh has called for regime change at the central bank and wants, among other things, a smaller Fed balance sheet.

Bitcoin and other ‍cryptocurrencies have 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.

Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said the Fed’s “bloated ‍balance sheet combined with heavy-handed bank regulation” had kept liquidity trapped on Wall Street instead ‌of ‌flowing to Main Street, helping fuel bubbles in assets such as bonds, crypto, metals and meme stocks.

Ether also fell 11.76 percent to $2,387.77 on Saturday afternoon. Cryptocurrencies have been struggling for direction since tumbling last year, having been left behind by big rallies in gold and stocks.

“Sometimes these ​price adjustments feed on themselves,” Jacobsen said, adding that Friday’s abrupt drop had reminded people of the risks. He said it was “possible, if not likely, that we see more ‍selling over the next few days.”

Cryptos are having a rough time in what was once hoped to be a golden era of flows and friendly regulation under President ​Donald Trump. Market-leading bitcoin has lost a third ‍of its value since striking record highs in October last year.