On January 30, 2026, Eastern Time, former U.S. President Trump nominated Kevin Warsh as the Chairman of the Federal Reserve, and this personnel choice quickly became a new coordinate for global asset pricing. Wall Street and the crypto market simultaneously began recalculating interest rates, liquidity, and regulatory paths, revealing significant divergences regarding the monetary environment for the coming years: one side bets on earlier and more aggressive easing, while the other worries that the Federal Reserve will adopt a tougher stance to maintain its "credibility" against the backdrop of persistent high inflation. Amid such uncertainty, a crucial question for crypto assets emerges — how will monetary policy and regulatory orientation in the "Warsh era" rewrite the risk premium and survival space for crypto assets like Bitcoin?
From Yellen to Warsh: Washington Resets Monetary and Regulatory Coordinates
● Compared to the relatively predictable gradual interest rate hikes and moderate balance sheet reduction during the previous administration, the overall impression of the Federal Reserve's monetary and regulatory stance over the past few years has been one of oscillation between "maintaining financial stability" and "avoiding stifling innovation," while generally maintaining a gradual pace. This environment provided a window for crypto assets to gradually institutionalize amid volatility, leading the market to form a path dependency on the belief that policies "will not shift dramatically," laying the groundwork for current comparisons.
● Trump's bet on Warsh has been interpreted by many observers as a strategic move with both political and economic intentions: on one hand, Trump's camp hopes to reshape the Federal Reserve's decision-making body to increase coordination and cooperation with the White House's economic agenda; on the other hand, Warsh is seen as someone who understands Wall Street while holding reservations about the traditional central banking framework, leaving room for the coexistence of seemingly contradictory possibilities of "more aggressive easing" and "stronger control of the financial system."
● In the "Trump + Warsh" combination, the concerns of the stock market, the dollar, and crypto assets are clearly different: the equity market is more concerned with how falling interest rates open up valuation space, dollar participants focus on monetary credibility and inflation risks, while the crypto market must simultaneously digest three uncertainties — the direction of real interest rates, the tightness of dollar liquidity, and the temperature of regulatory attitudes. This makes the same personnel appointment magnified into entirely different narratives across different asset worlds.
Hawk or Dove? The Contradictory Reflection the Market Sees in Warsh
● From past public positions, Warsh has shown both vigilance towards the side effects of easing and support for flexible responses to shocks in specific environments. This style, which is neither typically "hawkish" nor purely "dovish," has been amplified by the market into a sense of "swing" during the current high-uncertainty phase. Investors find it difficult to encapsulate his preferences with simple labels and can only guess his policy response functions in different macro scenarios through scattered clues.
● On the interest rate path, one hypothesis is to quickly open the rate-cutting channel and slow down balance sheet contraction, thereby providing stronger support as economic pressures and financial market volatility increase; another is to maintain higher interest rates for a longer time, coupled with more decisive balance sheet reduction to rebuild the credibility of inflation targets. The former is beneficial for the overall valuation recovery of risk assets but may raise concerns about the fiat currency system, increasing interest in "hedging narratives" like Bitcoin; the latter may suppress the performance of high-beta assets but simultaneously strengthen the anchor of "policy credibility," forcing funds to price long-term risks more cautiously.
● What currently troubles the market is not a clear policy path but rather the absence of key information: there is no verified timeline for interest rate cuts, no clear guidance on the pace of quantitative easing or tightening, and a lack of reliable expectations regarding the target size of the balance sheet. In this vacuum, risk appetite is easily dominated by emotions and public opinion, and any fragmentary remarks about Warsh's "position" could be overly interpreted as signals of trend reversals.
The Sensitive Nerve of Crypto Assets in the New Chairman's Game
● For crypto assets, the change in the Federal Reserve Chair itself has an amplifying effect, as this market is highly sensitive to interest rate levels, dollar liquidity, and regulatory expectations: interest rates affect discount rates and holding costs, liquidity determines marginal buying power and leverage usage, and regulatory attitudes directly reshape compliance channels and the pace of institutional entry. Therefore, even without any specific measures being introduced, the personnel change itself is enough to trigger a round of "imaginative pricing."
● If a combination of "easing monetary policy + strong regulation" emerges in the future, it may result in: lower funding costs, a recovery in liquidity, but a significantly tighter regulatory framework for exchanges, custody, and compliant products. In this scenario, blue-chip assets within compliant channels may benefit, while off-chain gray areas and high-leverage speculation face greater pressure. Conversely, "tight monetary policy + relatively restrained regulation" would mean overall funding costs remain high, making it difficult for the market to rely on abundant liquidity to boost valuations, but if compliant institutions gain stable regulatory expectations, they may quietly increase their holdings of leading assets over a longer cycle, leading to structural differentiation.
● As institutional participation increases year by year, Wall Street no longer views crypto assets as a marginal hobby but as a part of alternative allocation within asset allocation models. The uncertainty surrounding Warsh will force asset managers to reassess the weight of crypto assets in their portfolios — whether to see them as "insurance" against traditional monetary policy errors or as higher beta liquidity vehicles. Such subtle changes in positioning will be reflected in medium- to long-term holding data and product design.
Regulation and Discourse Power: The Crypto "Positioning War" in Warsh's Hands
● Within Washington's traditional elite circles, Bitcoin has long been placed within a framework filled with tension: some believe that crypto assets may impose a certain "disciplinary constraint" on monetary and fiscal policy from a marginal position, reflecting the market's trust in policy through price fluctuations; others worry that these assets, which bypass traditional intermediaries, could weaken the toolbox available to central banks and regulatory agencies for maintaining financial stability and the security of payment systems. This divergence will not naturally disappear with the new chairman's appointment.
● If Warsh ideologically leans towards viewing crypto as a kind of "policy overseer," the regulatory path may place greater emphasis on transparency and monitorability: strengthening requirements for information disclosure, risk warnings, and capital adequacy, encouraging the inclusion of crypto business within the traditional financial regulatory framework rather than outright exclusion. Such a route may raise entry barriers and compress the space for high-risk products, but it also opens a more solid institutional foundation for compliant custody, compliant trading, and institutional-level infrastructure.
● Conversely, if Warsh firmly believes that crypto poses a threat to financial stability, he may push for a tougher combination of measures, such as implementing stricter scrutiny on cross-border operations of exchanges, increasing compliance costs for banks and brokerages involved in related businesses, and even setting up denser firewalls regarding capital flows, leverage usage, and derivative design. Such measures would significantly impact trading volumes and cross-border capital migration paths in the short term but could also accelerate the concentration of the industry chain from gray areas to a few compliant hubs.
Expectation Pull: The Concurrent Race of Hedging Narratives and Speculative Machines
● At the time of Warsh's appointment, two mainstream narratives about Bitcoin have been brought to the forefront again: one emphasizes its role as a "digital safe-haven asset" against inflation and policy errors, believing that every challenge to central bank independence and fiat currency credibility will benefit such assets; the other focuses more on its price elasticity and liquidity, viewing it as a high-beta speculative target driven by interest rate and dollar liquidity cycles. Both views are currently amplified, reinforcing the sense of division within the market.
● In the absence of clear data and policy guidance in the short term, the pricing frameworks of different participants have shown significant misalignment: high-frequency traders engage in short-term speculation based on emotional fluctuations and technical structures, while long-term funds attempt to find entry or accumulation windows in macro narratives and structural adoption data; miners weigh their power input against cash flow security, and their subjective judgments about future coin prices and regulatory environments directly influence their selling pace and hedging strategies. These different logics combined make prices particularly sensitive to news and rumors.
● It is especially important to be cautious of the current market sentiment indicators and public discourse, which contain significant information gaps and exaggerated risks: unverified "insider information," misinterpretations of individual statements, and over-narrativization of single price fluctuations could all be packaged as evidence of a "turning point in the era." For ordinary participants, treating scattered rumors as macro trend indicators often means impulsively leveraging or cutting losses at the worst points of volatility.
The Opening of the Warsh Era: The Crypto Market is Still Betting on Expectations
The relatively calm conclusion that can be drawn at this point is that the impact of the new chairman's appointment on the crypto market remains more at the level of "expectation repricing" rather than substantial policy implementation. Whether it is speculation about the interest rate path or interpretations of regulatory attitudes, these are amplifications built on a very limited amount of publicly available information layered with emotions and existing biases, still far from verifiable policy outcomes.
In this phase, a more actionable approach for investors is to build an "observation checklist" rather than rush to bet: including statements on inflation, asset prices, and financial innovation from Warsh's first press conference after taking office; changes in wording regarding economic risks and financial stability in previous interest rate statements; and collaborative signals with other regulatory agencies on crypto-related topics, all of which are more worthy of patient tracking than fragmented emotions on social media.
In times of high information uncertainty, position and leverage management itself is a core strategy. Allowing for some space for fluctuations while reserving operational flexibility for when the future policy framework gradually clarifies is often more likely to yield success than making "all in" or "liquidation-style" decisions at the peak of noise. What truly determines the fate of crypto assets in the Warsh era will not be a few days of severe price fluctuations but rather the slow convergence of monetary, regulatory, and technological adoption curves over the next few years.
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