The Federal Reserve’s January meeting minutes revealed a surprisingly hawkish committee. Several officials openly discussed rate hikes. That sets the stage for a dramatic policy clash when Kevin Warsh takes over as chair this summer.

The Fed’s hawkish stance now threatens to box in Warsh before he even starts, raising the stakes for both monetary policy and crypto markets.

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A Committee Tilting Hawkish — Right Before a Leadership Change

The FOMC voted 10-2 on Jan. 28 to hold rates at 3.5%-3.75%. Governors Christopher Waller and Stephen Miran dissented. Both preferred a quarter-point cut, citing labor market risks.

But the broader committee leaned the other way. Several participants warned that further easing amid elevated inflation could signal a weakened commitment to the 2% target. A larger group favored holding rates steady. They wanted a “clear indication that disinflation was firmly back on track” before cutting again.

Most strikingly, several officials wanted the post-meeting statement to reflect possible “upward adjustments” to the federal funds rate. This was a direct reference to potential rate hikes.

Powell Out, Warsh In — And a Policy Collision Looms

Chair Jerome Powell’s term ends in May. He has two more meetings at the helm. Trump announced on Jan. 30 that former Fed Governor Warsh would replace him.

Warsh has spoken in favor of lower rates. That aligns with Trump’s repeated calls for cheaper borrowing. The White House on Wednesday insisted recent data showed inflation was “cool and stable.”

But the committee’s hawkish majority may not cooperate. Rate decisions are made by 12 voting members. Only a few lean dovish. The rest see inflation risks as the top priority.

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Analysts noted that the committee’s hawkish tone could complicate Warsh’s confirmation process and limit his room to pivot toward cuts early in his tenure.

If confirmed, Warsh’s first meeting as chair would be in June. Futures traders price the next cut around the same time. But the Fed’s preferred inflation gauge — the PCE Price Index — is expected to re-accelerate in the coming months. That could delay any easing further.

Asian Liquidity Returns, Amplifying the Selloff

Bitcoin began sliding shortly after the minutes dropped during US afternoon trading. It fell from around $68,300 to below $66,500 by early Asian morning hours. That marked a 1.6% decline over 24 hours.

The timing mattered. Asian traders were returning from the Lunar New Year holiday. Rising volumes and turnover amplified the move lower. Escalating US-Iran tensions added fuel. Oil prices surged more than 4%, further weighing on risk appetite across crypto markets.

Coinbase CEO Brian Armstrong called the decline psychological rather than fundamental. He said the exchange was buying back shares and accumulating Bitcoin at lower prices.

What Comes Next

The Fed’s next meeting is on March 17-18. A cut there is effectively off the table. Markets now look to June as the earliest window.

But the real question extends beyond timing. It is whether Warsh can steer a deeply divided committee toward cuts while inflation remains sticky. The hawkish majority has made its position clear. Changing that will require more than a new chair.

For Bitcoin, the macro backdrop remains challenging. The combination of a hawkish Fed, a contested leadership transition, and returning Asian liquidity points to continued volatility in the weeks ahead.

Crypto industry executives at Cointelegraph’s LONGITUDE conference in Hong Kong stressed the importance of addressing Bitcoin’s technological risks and said that clear US regulations can’t come soon enough.

Co-hosted by crypto exchange OneBullEx, the Feb. 12 event opened with a fireside chat featuring Tron founder Justin Sun, who discussed what the industry needs to prioritize — including preparing for artificial general intelligence (AGI) — which many expect to arrive within the next few years.

“We need to create a very easy standard for AGI to use blockchain,” Sun said.

Sun’s fireside chat was followed by three panel discussions covering the quantum computing threat to Bitcoin, the potential impact of the US CLARITY Act on the industry, and the progress of crypto infrastructure toward a trillion-dollar scale.

Despite a volatile crypto market at the end of 2025, industry players expressed optimism about the industry’s future.

Bitcoiners should ‘discount the value’ until quantum solve

Quantum computing, which some in the Bitcoin community see as a serious potential threat, sparked a debate among panelists.

Capriole Investments founder Charles Edwards said the risk should be priced into Bitcoin until the asset becomes quantum-resistant.

“Today, you kind of have to start to discount the value of Bitcoin based on that risk until it’s solved,” Edwards said. He pointed to growing fears about quantum computing as a primary reason Bitcoin’s price ended the year lower than it started.

“If you just look at the data, 2025 should have been a great year for Bitcoin,” Edwards said, explaining that quantum became a “non-zero threat” and US-based Bitcoin ETF issuers began adding risk disclaimers for quantum.

Meanwhile, Matthew Roszak, Bloq chairman and Hemi co-founder, wasn’t as worried about how it might play out:

“To look at this as a movie trailer and what’s ahead for Bitcoin and quantum. Just the preview here. It’s a two-step process. We’re going to upgrade and chill. That’s it. That’s the process.”

Maelstrom managing partner and co-founder Akshat Vaidya admitted that quantum is an “existential threat,” but it will be met with a “coordinated response that’s proportionate.”

US CLARITY Act will be significant for the industry

White House crypto and AI czar David Sacks said in December that the US is “closer than ever” to passing the US CLARITY Act, which aims to provide the industry with clearer regulations.

Although the bill hasn’t passed, industry panelists agreed that the US has become noticeably more friendly toward crypto since President Donald Trump took office.

Sean McHugh, senior director at Dubai’s Virtual Assets Regulatory Authority, who previously worked in TradFi in the US, said one of the main reasons he moved to Dubai was its more crypto-friendly regulatory environment than the US.

“I think one of the reasons why I moved to Dubai is because, you know, they were committed to clarity when I left a year and a half ago,” McHugh said, adding:

“The US was in a very different place than it is now.”

Grayscale Investments’ chief legal officer, Craig Salm, pointed to past conflicts over crypto between the two US financial regulators during the Joe Biden administration. 

“There used to be this whole turf war between the SEC and the CFTC,” Salm said, adding:

“Your regulator fighting over jurisdiction just isn’t productive for anybody.”

Salm also noted that the environment has changed. Instead of clashing, the SEC and CFTC are meeting together and coordinating to bring much-needed clarity to the asset class.

“Which is exactly what I think we all need,” Salm said.

Doubts over crypto infrastructure readiness for big flows

When asked whether crypto infrastructure is ready to handle trillion-dollar institutional flows, the panelists expressed some doubts.

“I would say probably not yet,” Offchain Labs chief strategy officer A.J. Warner said.

Monad Foundation head of institutional growth, Joanita Titan, echoed Warner’s sentiment. “Billion-dollar payments or billion-dollar processing is not a problem, but trillion dollars, I don’t think we’re there yet,” she said.

Warner argued that the largest bottlenecks are “continuing to scale, resiliency of networks, and user experiences.”

Cointelegraph’s exclusive LONGITUDE events will continue in 2026, with editions planned for New York, Paris, Dubai, Singapore and Abu Dhabi.