#美联储主席人选预测 Market Insight
The “Hawk” on Wall Street and the “Friend” in the Crypto Circle: What Does Kevin Warsh’s Leadership of the Federal Reserve Mean?
Just now, the “water tap” of the global financial markets welcomed a new leader. Donald Trump officially nominated Kevin Warsh to serve as the next Federal Reserve Chair. Once the news broke, the crypto market and US stocks instantly “changed faces,” with Bitcoin experiencing a short-term dip, as if an invisible hand was throttling its throat. Many newcomers to the circle might be confused: changing the Fed chair, is it really such a big deal?
It’s like your neighborhood property manager has been replaced. The previous manager (Powell), though slow in action, was somewhat accustomed to him occasionally giving out benefits (interest rate cut expectations); the new manager (Warsh), reportedly a “stern judge,” not only dislikes giving benefits but might also tighten access control in the neighborhood.
For the crypto market, which relies on “liquidity” to survive, this is undoubtedly a sudden cold snap in early spring. But if we peel back the “hawkish” exterior, you’ll find that Kevin Warsh’s attitude towards Web3 actually hides a huge reversal. Today, let’s dig into what this “youngest president on Wall Street” might bring to our wallets.
Farewell to “Excessive Money Printing”: When the Biggest Whale Stops Spending
First, we need to understand why the market fears Kevin Warsh. In the financial world, Warsh has a prominent label—“Sound Money Advocate.” If the Federal Reserve is compared to a “water plant” responsible for injecting water into the market, previous heads (like Bernanke, Yellen) believed in “adding flour when there’s too much water, adding water when there’s too much flour,” printing money (QE) during crises. But Warsh is different. As early as after the 2008 financial crisis, he was the youngest “opponent” within the Fed. He publicly criticized the Fed’s bond-buying actions as “kidnapping other countries’ monetary policies,” believing that prolonged low interest rates would create huge asset bubbles.
What does this mean for the crypto market? Imagine that the reason cryptocurrencies (especially Bitcoin) can rise is largely because the money in the market is “too cheap.” When bank interest rates are only 0%, money floods into risk assets to seek returns. Warsh’s rise to power indicates that the era of “cheap money” might be coming to an end. He doesn’t sway like Powell, who swings between rate cuts this month and hints at hikes next month in a “taijiquan” style.
Warsh’s logic is very firm: inflation is a fierce tiger that must be kept in a cage. If he perceives a risk of rising inflation, he will not hesitate to maintain high interest rates or even tighten liquidity. For veteran crypto traders used to “the Fed printing money and then raising rates,” this is like being suddenly cut off from milk.
In the short term, market expectations of “rate cuts and liquidity flooding” will quickly cool down, which is the core logic behind the immediate decline in risk assets once the news is announced.
The Enemy of the Enemy is a Friend: The End of CBDC
If the story ends here, it’s indeed a bearish signal. But the world of Web3 is never black and white. Although Warsh is “hawkish” on monetary policy, he might be the industry’s biggest “ally” when it comes to crypto architecture. This inevitably brings up his attitude towards CBDC (Central Bank Digital Currency) and stablecoins.
In recent years, central banks around the world have been researching CBDC, trying to issue a digital currency fully controlled by the government. For crypto purists, CBDC is like installing a 24-hour surveillance camera in your wallet—every transaction is watched by the government. Kevin Warsh firmly opposes the Fed issuing retail CBDC. He has publicly stated that the Fed should not directly intervene in ordinary people’s bank accounts through CBDC, as it is inefficient and a violation of privacy.
He believes that the baton of innovation should be handed over to the private sector. Key point: he opposes government-issued CBDC but supports regulated private stablecoins (like USDC, PYUSD). In his vision, the future of digital dollars should not be the Fed releasing an app for everyone to use, but rather private companies like Circle and PayPal issuing stablecoins, with the Fed responsible for regulation and wholesale settlement behind the scenes. What does this mean for Web3?
It means the “Damocles sword” of regulation hanging over stablecoins for years might disappear. If Warsh takes office, the US is very likely to introduce clear legislation favorable to stablecoin development. Once stablecoins are integrated into the formal financial system, they will become a high-speed highway connecting traditional finance (TradFi) and decentralized finance (DeFi). This long-term benefit for the entire crypto ecosystem far exceeds the short-term thrill of a rate cut.
Bitcoin: From “Rat Poison” to “Alarm Bell”
Even more interesting is Warsh’s view on Bitcoin. Years ago, many traditional finance giants called Bitcoin “rat poison.” But Warsh’s perspective is very unique. Although he doesn’t believe Bitcoin can replace the dollar, he sees it as a “policy alarm.” He mentioned in an interview: “If Bitcoin’s price surges, it indicates that our fiat monetary policy has problems, and people no longer trust the dollar’s purchasing power.” This view is very “Austrian School.” He doesn’t see Bitcoin as an enemy to suppress but as a mirror. This attitude shift is crucial. In the eyes of current regulators, cryptocurrencies are often seen as “gambling dens that need regulation.” But in Warsh’s view, cryptocurrencies could be a “market mechanism to hedge against excessive fiat issuance.” If the Fed chair believes Bitcoin’s existence is reasonable and a form of supervision over the Fed’s own discipline, then the SEC’s (Securities and Exchange Commission) crackdown for “regulation’s sake” might be restrained at a higher level.
Post-Pain New Order
Looking ahead from the current point in time, Kevin Warsh’s nomination will bring a “schizophrenic” trend to the market.
Short-term (next 3-6 months): Be prepared for “hard times.” The market needs to reprice “liquidity expectations.” The fantasy of expecting the Fed to cut rates by 100 basis points quickly to pump the market may be shattered. As Warsh’s hawkish rhetoric ferments, US Treasury yields may stay high, draining liquidity from the crypto space. Altcoins and meme projects may face severe bloodletting.
Medium-term (next 1-2 years): With the new regulatory framework in place, we will see the “professionalization” of the US crypto market.
• Stablecoin payments will explode: With Fed’s tacit approval, stablecoins may truly enter the payment sector, not just trading chips on exchanges.
• Institutional entry accelerates: Warsh represents the consensus of Wall Street elites. His appointment will make giants like BlackRock and Fidelity more confident in allocating funds to crypto assets because they know policy risks are reduced.
Advice for ordinary investors: Don’t be scared by short-term price fluctuations, and don’t blindly leverage to chase rebounds.
Warsh’s appointment is essentially an important signal that the crypto market is moving from the “wild west” era to the “compliance” era. He may shut down the “floodgates,” but he will repair the pipeline to the future. In this process, projects without real value, solely supported by liquidity bubbles, will die; those that truly solve problems and are built on compliant stablecoins will usher in a real golden age. The Fed’s baton has been handed over, the style of the symphony has changed, but the dance is not over.
The “Hawk” on Wall Street and the “Friend” in the Crypto Circle: What Does Kevin Warsh’s Leadership of the Federal Reserve Mean?
Just now, the “water tap” of the global financial markets welcomed a new leader. Donald Trump officially nominated Kevin Warsh to serve as the next Federal Reserve Chair. Once the news broke, the crypto market and US stocks instantly “changed faces,” with Bitcoin experiencing a short-term dip, as if an invisible hand was throttling its throat. Many newcomers to the circle might be confused: changing the Fed chair, is it really such a big deal?
It’s like your neighborhood property manager has been replaced. The previous manager (Powell), though slow in action, was somewhat accustomed to him occasionally giving out benefits (interest rate cut expectations); the new manager (Warsh), reportedly a “stern judge,” not only dislikes giving benefits but might also tighten access control in the neighborhood.
For the crypto market, which relies on “liquidity” to survive, this is undoubtedly a sudden cold snap in early spring. But if we peel back the “hawkish” exterior, you’ll find that Kevin Warsh’s attitude towards Web3 actually hides a huge reversal. Today, let’s dig into what this “youngest president on Wall Street” might bring to our wallets.
Farewell to “Excessive Money Printing”: When the Biggest Whale Stops Spending
First, we need to understand why the market fears Kevin Warsh. In the financial world, Warsh has a prominent label—“Sound Money Advocate.” If the Federal Reserve is compared to a “water plant” responsible for injecting water into the market, previous heads (like Bernanke, Yellen) believed in “adding flour when there’s too much water, adding water when there’s too much flour,” printing money (QE) during crises. But Warsh is different. As early as after the 2008 financial crisis, he was the youngest “opponent” within the Fed. He publicly criticized the Fed’s bond-buying actions as “kidnapping other countries’ monetary policies,” believing that prolonged low interest rates would create huge asset bubbles.
What does this mean for the crypto market? Imagine that the reason cryptocurrencies (especially Bitcoin) can rise is largely because the money in the market is “too cheap.” When bank interest rates are only 0%, money floods into risk assets to seek returns. Warsh’s rise to power indicates that the era of “cheap money” might be coming to an end. He doesn’t sway like Powell, who swings between rate cuts this month and hints at hikes next month in a “taijiquan” style.
Warsh’s logic is very firm: inflation is a fierce tiger that must be kept in a cage. If he perceives a risk of rising inflation, he will not hesitate to maintain high interest rates or even tighten liquidity. For veteran crypto traders used to “the Fed printing money and then raising rates,” this is like being suddenly cut off from milk.
In the short term, market expectations of “rate cuts and liquidity flooding” will quickly cool down, which is the core logic behind the immediate decline in risk assets once the news is announced.
The Enemy of the Enemy is a Friend: The End of CBDC
If the story ends here, it’s indeed a bearish signal. But the world of Web3 is never black and white. Although Warsh is “hawkish” on monetary policy, he might be the industry’s biggest “ally” when it comes to crypto architecture. This inevitably brings up his attitude towards CBDC (Central Bank Digital Currency) and stablecoins.
In recent years, central banks around the world have been researching CBDC, trying to issue a digital currency fully controlled by the government. For crypto purists, CBDC is like installing a 24-hour surveillance camera in your wallet—every transaction is watched by the government. Kevin Warsh firmly opposes the Fed issuing retail CBDC. He has publicly stated that the Fed should not directly intervene in ordinary people’s bank accounts through CBDC, as it is inefficient and a violation of privacy.
He believes that the baton of innovation should be handed over to the private sector. Key point: he opposes government-issued CBDC but supports regulated private stablecoins (like USDC, PYUSD). In his vision, the future of digital dollars should not be the Fed releasing an app for everyone to use, but rather private companies like Circle and PayPal issuing stablecoins, with the Fed responsible for regulation and wholesale settlement behind the scenes. What does this mean for Web3?
It means the “Damocles sword” of regulation hanging over stablecoins for years might disappear. If Warsh takes office, the US is very likely to introduce clear legislation favorable to stablecoin development. Once stablecoins are integrated into the formal financial system, they will become a high-speed highway connecting traditional finance (TradFi) and decentralized finance (DeFi). This long-term benefit for the entire crypto ecosystem far exceeds the short-term thrill of a rate cut.
Bitcoin: From “Rat Poison” to “Alarm Bell”
Even more interesting is Warsh’s view on Bitcoin. Years ago, many traditional finance giants called Bitcoin “rat poison.” But Warsh’s perspective is very unique. Although he doesn’t believe Bitcoin can replace the dollar, he sees it as a “policy alarm.” He mentioned in an interview: “If Bitcoin’s price surges, it indicates that our fiat monetary policy has problems, and people no longer trust the dollar’s purchasing power.” This view is very “Austrian School.” He doesn’t see Bitcoin as an enemy to suppress but as a mirror. This attitude shift is crucial. In the eyes of current regulators, cryptocurrencies are often seen as “gambling dens that need regulation.” But in Warsh’s view, cryptocurrencies could be a “market mechanism to hedge against excessive fiat issuance.” If the Fed chair believes Bitcoin’s existence is reasonable and a form of supervision over the Fed’s own discipline, then the SEC’s (Securities and Exchange Commission) crackdown for “regulation’s sake” might be restrained at a higher level.
Post-Pain New Order
Looking ahead from the current point in time, Kevin Warsh’s nomination will bring a “schizophrenic” trend to the market.
Short-term (next 3-6 months): Be prepared for “hard times.” The market needs to reprice “liquidity expectations.” The fantasy of expecting the Fed to cut rates by 100 basis points quickly to pump the market may be shattered. As Warsh’s hawkish rhetoric ferments, US Treasury yields may stay high, draining liquidity from the crypto space. Altcoins and meme projects may face severe bloodletting.
Medium-term (next 1-2 years): With the new regulatory framework in place, we will see the “professionalization” of the US crypto market.
• Stablecoin payments will explode: With Fed’s tacit approval, stablecoins may truly enter the payment sector, not just trading chips on exchanges.
• Institutional entry accelerates: Warsh represents the consensus of Wall Street elites. His appointment will make giants like BlackRock and Fidelity more confident in allocating funds to crypto assets because they know policy risks are reduced.
Advice for ordinary investors: Don’t be scared by short-term price fluctuations, and don’t blindly leverage to chase rebounds.
Warsh’s appointment is essentially an important signal that the crypto market is moving from the “wild west” era to the “compliance” era. He may shut down the “floodgates,” but he will repair the pipeline to the future. In this process, projects without real value, solely supported by liquidity bubbles, will die; those that truly solve problems and are built on compliant stablecoins will usher in a real golden age. The Fed’s baton has been handed over, the style of the symphony has changed, but the dance is not over.
