Kevin Warsh Emerges as the Strongest Fed Chair Candidate—Why Did Bitcoin React Immediately?

Jakarta, Pintu News – The second half of the crypto market is getting tense again after Kevin Warsh’s name emerged as a candidate for the next Federal Reserve Chair. The former governor of the US central bank is seen as bringing a tighter policy direction, fueling concerns about risky assets.

At the same time, signals from the White House about next week’s announcement made speculation even wilder. As a result, Bitcoin (BTC) has been dragged down as market participants think a change in the Fed’s leadership could alter global liquidity flows.

Trump hints at new Fed chair, Kevin Warsh’s name comes up

Donald Trump stated that the name of the next Fed Chair will be announced next week. The statement came after the central bank kept interest rates on hold, which reignited Trump’s criticism of Jerome Powell. Trump thinks interest rates are still too high and is pushing for aggressive cuts. In fact, he called a cut of 2 to 3 percentage points as a step that should be done.

While there has been no official confirmation, Kevin Warsh has been mentioned most often in various reports. Warsh served as a member of the Federal Reserve Board of Governors from 2006 to 2011. This track record makes his name considered to have credibility and experience in dealing with periods of crisis. This situation magnifies the market’s attention because a change of figure at the top of the Fed often changes monetary policy expectations.

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Polymarket favors Warsh, market expectations change

The strongest signal came from the Polymarket prediction market, which placed Warsh with a chance of around 92.5%. That figure is far behind Rick Rieder who is in the range of 3.4% and Judy Shelton around 2.2%. The disparity in probabilities led market participants to consider Warsh’s scenario as the most likely outcome. When probabilities are so dominant, price reactions often occur even before the official decision is announced.

Warsh’s rise also affected sentiment towards cryptoassets at large, not just Bitcoin (BTC). The market typically associates the Fed Chair nominee with the direction of interest rates, liquidity availability, and the cost of capital. If the market thinks policy will be tighter, interest in risky assets tends to decline. Therefore, Bitcoin’s (BTC) weak movement is seen as a response to changing expectations, not merely technical factors.

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Warsh’s tight monetary stance dampens Bitcoin sentiment

Warsh is known to favor tight monetary discipline, including a tendency towards higher interest rates and more limited liquidity. Such an approach generally suppresses speculative assets as funds become more expensive and money flows more selective. In a high interest rate environment, investors often move allocations to instruments that are considered safer.

As a result, Bitcoin (BTC) often faces pressure when the market expects tightening to continue. In addition, Warsh has expressed skepticism towards Bitcoin (BTC) as a means of payment due to its volatility. These statements reinforce the perception that he is not a crypto-friendly figure.

However, Warsh has also admitted that Bitcoin (BTC) can act as a gold-like store of value in certain situations. He even called Bitcoin (BTC) “reasonable” as part of a portfolio when the US dollar is weak, so his view is not entirely black-and-white.

Conclusion

The strengthening chances of Kevin Warsh as the next Fed Chair is a major trigger for crypto market jitters as it is synonymous with tighter monetary policy. On the other hand, Trump’s push for quick rate cuts could potentially create policy direction tension if Warsh is elected.

It is this uncertainty that makes Bitcoin (BTC) sensitive to any news updates and probability changes in the prediction market. Until the official announcement comes out, volatility is likely to remain high as the market continues to weigh the interest rate scenario, liquidity, and global risk appetite.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• Coinpedia. Top Fed Chair Pick Kevin Warsh Seen as Bearish for Bitcoin Prices. Accessed on February 2, 2026
• Featured Image: Bloomberg