The Federal Reserve Chair Has Changed!

On January 30th, Trump officially nominated Kevin Warsh to succeed Powell, with a term expected to start from May 2026. This instantly sparked a frenzy in the global financial circle and caused the crypto world to explode—$BTC plummeted straight from the high of $90,000, dropping over 6% in a day, with the entire market liquidating over $1.6 billion.

You might be wondering: How does the change of the Fed Chair affect me? Why is the price so sensitive? Today, I’ll explain in plain language the real impact of this event on the crypto market.

1. Why did the market panic first?
Warsh is a former Fed governor with a fundamentally “hawkish” stance. He advocates:
- No reckless expansion of the Fed’s balance sheet (continue QT)
- Maintaining a certain level of real interest rates
- A steady pace of rate cuts, not expecting a return to the “unlimited liquidity” of 2021
Simply put: money won’t become cheap so easily.
When liquidity tightens, risk assets (including $BTC, $ETH, meme coins) lose attractiveness → leveraged players get liquidated first → prices pull back. That’s why, upon the nomination, $BTC immediately “sold the news” with a sharp drop.

2. But Warsh actually doesn’t dislike Bitcoin
Interestingly, Warsh’s public attitude toward Bitcoin is much friendlier than Powell’s:
He calls it an “important asset”
Compares it to a “sustainable store of value,” similar to digital gold
Says Bitcoin can serve as a “good policeman” for monetary policy—when prices fall, it reminds the Fed that “your policies are problematic”
He also opposes retail CBDCs (worried about privacy leaks), supports clear rules for blockchain, rather than outright bans.
So from a personal perspective, he might be the “first Fed Chair who understands crypto”—at least he won’t completely ignore crypto like before.

3. Short-term vs. Mid-to-long-term: a double-edged sword
Short-term: bearish sentiment confirmed. Higher real interest rates + strong dollar expectations remain, $BTC may continue testing support at 81k-80k. Be cautious with leverage; market sentiment is fragile.
Mid-to-long-term: there’s a chance for a rebound!
Trump is the big boss—he wants low interest rates, a bullish stock market, and a hot economy. If Warsh’s hawkish stance cools the economy, Trump won’t sit idly by.
Clearer regulations → more institutional participation (ETFs, corporate holdings will accelerate)
If AI/productivity truly suppresses inflation, Warsh might allow a more moderate rate cut path, which is a sustainable positive for liquidity-friendly assets.

In one sentence: Warsh is not a “money-printing savior,” but he’s also not an enemy of crypto. He might bring more mature rules of the game, gradually turning the crypto space from a pure casino into a mainstream asset class.

A little advice for beginners:
Don’t FOMO chasing highs, and don’t panic sell. Dollar-cost averaging or buying on dips is the way to go.
Keep an eye on: Senate confirmation hearings + Warsh’s first public statement + June FOMC.
If he admits that “productivity growth allows for looser policies,” the market will likely V-reverse.
The crypto world has never lacked stories; this change of chairmanship is just a new chapter.
Are you continuing to HODL with faith, or waiting for signals? Share your thoughts in the comments!