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Is Trump’s New Fed Chair Kevin Warsh Bullish for Crypto?

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Is Trump’s New Fed Chair Kevin Warsh Bullish for Crypto?

President Donald Trump has named Kevin Warsh as his pick for the next Chair of the US Federal Reserve, setting up a leadership change at the world’s most powerful central bank in May 2026.

The nomination comes at a fragile moment. Inflation remains sticky, markets are jittery, and crypto is already under pressure from macro uncertainty. The choice of Fed chair now matters more than at any point since the pandemic.

So who is Kevin Warsh, how does he differ from Jerome Powell, and what could his appointment mean for interest rates — and for crypto markets in the second half of 2026?

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Who Is Kevin Warsh?

Kevin Warsh is not an outsider to the Federal Reserve. His appointment will require Senate confirmation. But markets are already reacting to the policy signal behind the pick.

Warsh served as a Fed Governor from 2006 to 2011, becoming the youngest governor in the institution’s history. 

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He worked closely with then-chair Ben Bernanke during the global financial crisis and represented the Fed at G20 meetings.

Back in 2007, Kevin Warsh Spoke at the First-Ever Fed Meeting Recorded by Cameras

After leaving the Fed, Warsh moved into academia and policy. He is currently a senior fellow at Stanford’s Hoover Institution and a frequent critic of modern central banking.

Warsh’s Monetary Policy Record: A Known Inflation Hawk

Historically, Warsh is best described as an inflation hawk.

During the 2008–2009 crisis, he repeatedly warned that aggressive easing could fuel future inflation. He opposed extended quantitative easing and pushed for a smaller Fed balance sheet, even when inflation was subdued.

This puts him at odds with the post-2020 Fed playbook.

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The Inflation Hawk Personality Explained. Source: Investopedia

However, Warsh’s stance has evolved. In recent years, he has argued that deregulation and fiscal restraint could lower inflation naturally — allowing the Fed to cut rates without risking price instability.

That shift matters in the current cycle.

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How Warsh Differs From Jerome Powell

The contrast with Jerome Powell is sharp.

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Powell embraced emergency stimulus during COVID and initially downplayed inflation risks in 2021. That delay later forced the Fed into its most aggressive tightening cycle in decades.

Warsh has openly called that period a policy failure, arguing the Fed lost credibility by reacting too late.

He also criticizes the Fed’s expanding mandate. Warsh opposes central bank involvement in climate policy, social issues, and political signaling. Powell has been more open to these initiatives.

In short, Warsh favors a narrower, more traditional Fed — focused strictly on inflation, employment, and financial stability.

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What This Means for Interest Rates in 2026

The Fed’s latest decision this week kept rates unchanged at 3.50%–3.75%, signaling caution after multiple cuts in 2025.

Markets currently expect the next rate cut no earlier than mid-2026.

Warsh’s appointment complicates that outlook.

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On one hand, his inflation hawk reputation suggests discipline. He is unlikely to rush cuts without clear evidence inflation is contained.

On the other hand, Warsh has publicly supported Trump’s view that excessive regulation and fiscal expansion are inflationary. If those pressures ease, he could back faster normalization.

That creates a scenario where rate cuts resume in the second half of 2026 — but under tighter justification.

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Warsh and Crypto: Not Anti, But Not an Evangelist

Warsh’s relationship with crypto is nuanced.

He has invested personally in crypto-related firms, including the algorithmic stablecoin project Basis and crypto asset manager Bitwise. That alone separates him from many traditional policymakers.

Back in 2021, Kevin Warsh Invested in a $70 Million Funding Round for Bitwise

At the same time, Warsh is deeply skeptical of crypto as money.

He has argued that Bitcoin’s volatility makes it unsuitable as a medium of exchange. However, he has acknowledged Bitcoin could function as a store of value, similar to gold.

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His strongest stance is against unregulated private money. Warsh has repeatedly called for clearer rules around stablecoins and supports a wholesale US CBDC limited to interbank use, not retail consumers.

That positions him closer to regulatory clarity than outright hostility.

Could Warsh Be Bullish for Crypto?

Short term, probably not.

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Crypto markets remain driven by liquidity, rates, and macro risk. Warsh will not take office until May, and rate policy will remain data-dependent.

But medium to long term, the picture changes.

Warsh’s emphasis on credibility, rule clarity, and a restrained Fed could reduce policy uncertainty — something crypto markets have struggled with for years.

If inflation continues to cool and Warsh supports rate cuts later in 2026, risk assets would benefit. Crypto, which remains highly sensitive to real yields and liquidity expectations, would likely respond positively.

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Importantly, Warsh is not ideologically anti-crypto. He views blockchain as a useful technology and prefers regulation over suppression.

That alone could improve sentiment.

Warsh is unlikely to spark an immediate rally. But if his tenure brings clearer regulation, lower inflation, and a path to sustained rate cuts, the second half of 2026 could look meaningfully more constructive.

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ME Token Slumps After Magic Eden Announces Buybacks, Staking Rewards

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ME Token Slumps After Magic Eden Announces Buybacks, Staking Rewards


The former NFT marketplace said it will allocate revenue to the ME ecosystem, including USDC rewards paid out to stakers.

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Solana (SOL) Plunges Below $100, Bitcoin (BTC) Recovers From 15-Month Low: Market Watch

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BTCUSD Feb 4. Source: TradingView


Meanwhile, HASH and HYPE have declined the most over the past 24 hours after charting impressive gains lately.

Bitcoin’s adverse price actions as of late worsened yesterday when the asset tumbled to its lowest positions since early November 2024 at $73,000 before recovering by a few grand.

Most altcoins followed suit with enhanced volatility, but some, such as SOL, HYPE, and CC, have been hit harder than others.

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BTC’s Latest Rollercoaster

It was just a week ago when the primary cryptocurrency challenged the $90,000 resistance ahead of the first FOMC meeting for the year. After it became official that the Fed won’t cut the rates again, BTC remained sluggish at first but started to decline in the following hours.

The escalating tension in the Middle East was also blamed for another crash that took place on Thursday when bitcoin plunged to $81,000. It bounced off to $84,000 on Friday but tumbled once again on Saturday, this time to under $75,000. Another recovery attempt followed on Monday, only to be rejected at $79,000.

Tuesday brought the latest crash, this time to a 15-month low of $73,000. It has rebounded since then to just over $76,000, but it’s still 3% down on the day. Moreover, it has lost 14% of its value weekly and a whopping 18% monthly.

Its market capitalization has plummeted to $1.525 trillion on CG, while its dominance over the alts has declined to 57.3%.

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BTCUSD Feb 4. Source: TradingView
BTCUSD Feb 4. Source: TradingView

SOL Below $100

Most larger-cap altcoins have felt the consequences of the violent market crash lately. Ethereum went from over $3,000 to $2,100 in the span of a week, before bouncing to $2,280 as of now. BNB is down to $760, while SOL has plummeted to under $100 after a 7% daily decline.

Even the recent high-flyer HYPE has retraced hard daily. The token is down by 11% to $33. CC and ZEC are also deep in the red, while XMR has gained the most from the larger caps.

The cumulative market cap of all crypto assets has seen more than $70 billion erased in a day and is down to $2.65 trillion on CG.

Cryptocurrency Market Overview Feb 4. Source: QuantifyCrypto
Cryptocurrency Market Overview Feb 4. Source: QuantifyCrypto

 

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

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Pumpfun Unveils Investment Arm and $3 Million Hackathon

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Pumpfun Unveils Investment Arm and $3 Million Hackathon


PUMP rallied as much as 10% but erased its gains as crypto markets dipped.

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

Assets in spot Bitcoin (BTC) ETFs slipped below $100 billion on Tuesday following a fresh $272 million in outflows.

According to data from SoSoValue, the move marked the first time spot Bitcoin ETF assets under management have fallen below that level since April 2025, after peaking at about $168 billion in October

The drop came amid a broader crypto market sell-off, with Bitcoin sliding below $74,000 on Tuesday. The global cryptocurrency market capitalization fell from $3.11 trillion to $2.64 trillion over the past week, according to CoinGecko.

Altcoin funds secure modest inflows

The latest outflows from spot Bitcoin ETFs followed a brief rebound in flows on Monday, when the products attracted $562 million in net inflows.

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Still, Bitcoin funds resumed losses on Tuesday, pushing year-to-date outflows to almost $1.3 billion, coming in line with ongoing market volatility.

Spot Bitcoin ETF flows since Jan. 26, 2026. Source: SoSoValue

By contrast, ETFs tracking altcoins such as Ether (ETH), XRP (XRP) and Solana (SOL) recorded modest inflows of $14 million, $19.6 million and $1.2 million, respectively.

Is institutional adoption moving beyond ETFs?

The ongoing sell-off in Bitcoin ETFs comes as BTC trades below the ETF creation cost basis of $84,000, suggesting new ETF shares are being issued at a loss and placing pressure on fund flows.

Market observers say that the slump is unlikely to trigger further mass sell-offs in ETFs.

“My guess is vast majority of assets in spot BTC ETFs stay put regardless,” ETF analyst Nate Geraci wrote on X on Monday.

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Source: Nate Geraci

Thomas Restout, CEO of institutional liquidity provider B2C2, echoed the sentiment, noting that institutional ETF investors are generally resilient. Still, he hinted that a shift toward onchain trading may be underway.

Related: VistaShares launches Treasury ETF with options-based Bitcoin exposure

“The benefit of institutions coming in and buying ETFs is they’re far more resilient. They will sit on their views and positions for longer,” Restout said in a Rulematch Spot On podcast on Monday.

“I think the next level of transformation is institutions actually trading crypto, rather than just using securitized ETFs. We’re expecting the next wave of institutions to be the ones trading the underlying assets directly,” he noted.