Bitcoin Slips Below $78,000 After Fed Chair Warsh Delivers No Rate Clues at Jackson Hole

Bitcoin retreated below $78,000 on Saturday, extending a selloff triggered by Federal Reserve Chair Kevin Warsh’s refusal to offer markets any clarity on the next interest-rate move at his Jackson Hole keynote.

The largest cryptocurrency by market cap traded at $77,384, down 2.5% over the past 24 hours, according to data cited by the Economic Times. Ethereum fell 1.9% to $2,430. The global crypto market capitalization declined 2.57% to $3.07 trillion, as reported by CoinGecko.

The pullback came after a week of gains that briefly pushed Bitcoin above $80,000 earlier in the week. That rally, according to decrypt.co, was fueled largely by the Treasury Department’s move to buy back more long-dated debt — not by anything the Federal Reserve said.

Warsh, speaking in his first Jackson Hole keynote on his 100th day as Fed chair, declared that forward guidance — the central bank’s practice of hinting at future rate moves — has "overstayed its welcome." He told the symposium that "a quieter Fed, more purposeful in its communications, is better able to meet its objectives," according to decrypt.co.

"Market participants will always try to anticipate what we will do next," Warsh said. "But we should not indulge a regime in which market participants are looking primarily to the Fed for their next trade."

The Fed chair warned of a "hall-of-mirrors problem," arguing that when traders make moves based on Fed hints rather than raw economic data, both the central bank and markets end up staring at each other's expectations instead of reality, decrypt.co reported.

Buried in the footnotes of his prepared remarks was a citation of his own 2022 essay on cryptocurrency and the U.S. dollar. Warsh argued that "money" deserves closer Fed attention, but never directly mentioned cryptocurrency in his main speech.

Warsh's comments on inflation carried the most immediate weight for risk assets. The Fed's preferred gauge, the PCE price index, is running at 3.7% annually — nearly double the 2% target. The chair said 54% of goods and services the Fed tracks have posted price gains above 3% over the past year, still well above pre-pandemic norms. He offered no timeline for when that changes.

"The suggestion, though, that the Federal Reserve still has 'work to do' to curb inflation was hawkish enough, it seems, for traders to briefly sell off Bitcoin," according to decrypt.co. The cryptocurrency shed roughly $1,000 from its price immediately after the remarks before recovering almost immediately.

But the recovery proved short-lived. By Saturday, Bitcoin had fallen from above $81,000 earlier in the week to around $77,700, Riya Sehgal, Research Analyst at Delta Exchange, told the Economic Times. Ethereum was near $2,440, and total crypto market capitalization declined from above $2.7 trillion.

Leverage amplified the selling. According to the Economic Times, "around $488 million in crypto positions were liquidated, including more than $360 million in leveraged longs." Bitcoin's move below $77,000 triggered further forced selling, Sehgal said.

Treasury yields moved higher after Warsh’s remarks, putting pressure on risk assets including cryptocurrencies, the analyst added.

Among major altcoins, BNB, XRP, Solana, Hyperliquid, Dogecoin and Cardano declined by up to 4.2%, while Tron gained, the Economic Times reported. Over the past week, Bitcoin and Ethereum were down 1.1% and 3% respectively, while BNB, XRP, Tron, Dogecoin and Cardano fell by up to 20.9%, and Solana and Hyperliquid posted gains.

Despite the macro uncertainty, crypto exchange-traded products continued to attract fresh capital. According to Nischal Shetty, Founder of WazirX, speaking to the Economic Times, crypto ETFs recorded $482.13 million in inflows on August 25, led by roughly $310 million into Bitcoin and $172 million into Ethereum. "This support, alongside gains in US technology stocks, helped sustain a cautiously positive market structure," Shetty said.

The next rate decision from the Federal Reserve lands on September 15–16, alongside a fresh round of economic projections — exactly the kind of forward-looking signal Warsh spent his Jackson Hole speech explaining he would rather not give.

Data from CME FedWatch, cited by decrypt.co, showed traders had already cut the odds of a September rate hike to 38.4% from 82% a month earlier, with the rest betting on no change. Warsh gave those traders nothing new to reprice against.