Kevin Warsh has been named by Donald Trump as the nomination to replace Jerome Powell for Chair of the Federal Reserve. What could Trump’s nominee mean for Bitcoin and crypto?
Jan 30, 2026
Bitcoin continued its further slide on Thursday night as US President Donald Trump announced he would reveal his nomination to replace current Federal Reserve Chair Jerome Powell. Prediction markets showed that users strongly believed Kevin Warsh would be the nominee, and they were proven right. This Friday morning, Trump officially announced the former Reserve Board member as his selection. But Warsh’s recent interviews seem to contradict his previous stance on Bitcoin.
Can crypto finance trust Warsh?
Warsh has historically shown some positivity to Bitcoin as an asset, but his new policy approach and attitude in practice can be interpreted as bearish for Bitcoin, should he assume the role.
Trump’s disapproval of current Fed Chair Jerome Powell is well documented, and it was readily assumed that Trump would be the nominee ready by the end of January to succeed Powell in May 2026. The lead up to the selection garnered attention, but Trump remains confident in his choice as he looked for a Chair who would push to cut interest rates, something Warsh has only recently started agreeing with as policy.
Crypto finance and traders have been watching closely because the Federal Reserve Chair can shape expectations around two variables crypto cares about the most: real interest rates and system liquidity.
A Stanford and Harvard graduate, Warsh first entered public policy in 2002, when he acted as executive secretary under the National Economic Council during the Bush Administration. In 2006, Bush would nominate Warsh to serve on the Federal Reserve’s Board of Governors. His tenure would last until March 2011, which saw the Federal Reserve expand its powers and tools during the financial crisis that began in 2008.
Warsh would place an emphasis on halting interest rate cuts, earning him the label of an “inflation hawk”. In more recent years, he has made multiple criticisms on the Federal Reserve, like in 2015, where he said “Virtually all guilds have a certain kind of groupthink. The economics profession is not immune to that” in an interview with CNBC. This past July, he held another interview claiming the inflation surge from 2021 to 2022 “brought about the greatest mistake in macroeconomic policy in 45 years, that divided the country.”
Most of his perceived support for BitCoin comes from a 2021 interview with Squawk Box, saying “I guess if you are under 40, Bitcoin is your new gold.” He went on to say, “I think that bitcoin does make sense as part of a portfolio in this environment where you have the most fundamental shift in monetary policy since Paul Volcker…” Warsh seemed to indicate that BitCoin was beginning to cause effects with serious political and economic implications, even if he couldn’t ascertain the actual extent that we see 5 years later.
However, today his grasp on the effects seems to be much clearer and in focus. In addition to putting multiple criticisms on the Federal Reserve, Warsh believes monetary policy needs to be updated for the digital world, as he implies in his interview with The Hoover Institute from July of last year. Warsh stated
I wish I had understood as clearly as he (Marc Andreessen) did, how transformative Bitcoin and this new technology would be. Bitcoin doesn't trouble me. I think of it as an important asset that can help inform policymakers when they’re doing things right and wrong. It is not a substitute for the dollar.
It’s worth breaking down what Warsh meant in these interviews. He was not pining for the Fed to adopt Bitcoin or give it regulatory freedoms. Rather, he was pointing to how Bitcoin has been adopted by investors as a store-of-value that mirrors fiat during a time of heavy handed monetary policy. As Bitcoin and other cryptocurrencies become more mainstream, Warsh sees the need for a monetary policy that better reflects the new class of digital assets.
Warsh has had a history of criticizing quantitative easing, where central banks buy government issued bonds and other assets to stimulate the economy. He called the practice “reverse Robin Hood” in a 2015 panel hosted by the Brookings Institution, believing that it did little to help regular consumers.
Bitcoin has historically benefited when liquidity is abundant and yields are falling. A chair who is reluctant to expand the balance sheet outside of economic crises may result in fewer periods of liquidization that have helped more risky assets in the past.
While Warsh is labeled as an “inflation hawk”, his stance on rate cutting has shifted to receptiveness, as he illustrates in his op-ed for the Wall Street Journal. To be sure, this is a departure from his previous stances on monetary policy that aligns more with Trump’s vision. The sincerity of his change in opinion could raise questions from the market on whether or not Bitcoin will really have a place for consideration in policy. This depends on which tools are expected to be favored under Warsh’s potential tenure: lower policy rates or balance sheet shrinkage.
Even without crypto legislation coming into play, The Federal Reserve can affect how receptive or restrictive banking and payment systems feel about crypto. The way financial institutions are monitored, how payment innovation is discussed, and the prioritization (or not) of Central Bank Digital Currency (CBDC) will influence how crypto payments and transactions are utilized, or even accepted.
Warsh previously made public considerations for FedCoin, a CBDC currency, “where we would bring legal activities into a digital coin.” This was back in 2018, when cryptocurrency was still primarily dominated by Bitcoin in the mainstream eye. While not a stablecoin, like USDT or USDC, in practice, the proposed FedCoin would act as a digital bank note.
This shouldn’t be taken as a full endorsement of Bitcoin or other cryptocurrencies. After all, he still said the dollar takes precedence just a few months ago. Plus, there’s a big difference between digital currency and decentralized digital currency. Bringing legal activities would likely require centralization of the currency and chain used to maintain it.
The Reserve does not actually set up crypto laws or legislation, but we do know it can affect financial conditions in two ways through Bitcoin’s cycles:
Real Yields: returns from interest payments on bonds after adjusting for inflation. Higher inflation adjusted yields can drive away from non-yielding assets, like Bitcoin.
Dollar Liquidity: Easing conditions usually help risk appetite in the global market, driving more purchases and holdings of Bitcoin and other crypto.
If safe yields are on the rise, investors and institutions won’t have much reason to hold onto Bitcoin without any returns or dividends. They could perceive Warsh’s adversity to ratecutting as a reason to sell off Bitcoin and volatile digital currencies because the opportunity costs of holding them rises. While Warsh has shown recent changes in his thought, the uncertainty and added layer of political maneuvering could affect how he implements his policy.
For that same reason, investors are also going to be looking for how much liquidity is injected or pulled from the economy. We know Warsh isn’t a big fan of easing through bonds, but that raises a question of if he will decide to steer influence towards letting bonds sell off and shrink the balance sheet.
Bitcoin has shown to perform better when there is more liquidity in the market, and struggles when the liquidity leaves, but it's not always the case. Should guidance take a direction that is counter to Bitcoin’s strength, the market conditions could leave the currency in the cold.
The current crypto market crash shows that risk appetite from investors is leaning towards adverse, and there seems to be no conclusive evidence that prices will stabilize any time soon.
Warsh is only nominated, not confirmed, at this point in time. There’s no guarantee that he will be the Chair come May, or what policies and stances he will take. This is merely speculation, but based on his previous statements. His more recent statements and Trump’s comments on rate cutting are indicative of how principles and approach can change. One has to assume that the Chair position brings a certain layer of politicization with it to navigate, despite what others say. While the Reserve presents itself as “independent within the government,” it nonetheless must answer to Congress and the broader US public.
If you are trying to figure out whether a chair could be bullish or bearish on crypto, ignore crypto quotes and tweets. Ask these questions instead:
Do they favor higher real yield rates (inflation curbing) or easier policy (inflation tolerance)?
Do they prefer faster liquidity drains or early stops to pivot?
How do they address financial stability during stressful markets?
Do they push towards stricter bank-supervision for crypto, or look for clearer frameworks?
Do they prioritize constraining inflation or growing employment rates?
Level 2, ‘The Fort’, HardRocks Business Park, Burmarrad Road, Naxxar, NXR 6345
Crypto Casino is an independent platform providing unbiased information about online crypto casinos, games, and bonuses. We are not owned or operated by any gambling provider. All reviews, rankings, and guides are written by our expert team based on honest analysis and the latest available data.
Copyright©Crypto.Casino Ltd. 2026. All Rights Reserved
