Trump Taps Former Fed Governor Kevin Warsh for Chair, Signaling Potential Shift in Crypto Stance
WASHINGTON — In a move that has abruptly refocused market attention from inflation battles to the future of digital asset regulation, former President Donald Trump announced his intent to nominate Kevin Warsh as the next Chair of the Federal Reserve. The decision, communicated via Truth Social on Thursday, comes at a critical juncture for both monetary policy and the beleaguered crypto sector.
Warsh, who served on the Fed's Board of Governors from 2006 to 2011, would succeed Jerome Powell in May. His nomination lands amid a tense market environment, characterized by volatile risk assets and intense scrutiny over the central bank's independence and rate-cut trajectory.
While not a staunch crypto advocate, Warsh's record reveals a nuanced perspective distinct from outright skepticism. In a 2018 Wall Street Journal op-ed, he argued Bitcoin's volatility disqualified it as a reliable currency but acknowledged its emerging role as a "digital store of value." He later framed Bitcoin adoption in generational terms during a 2021 CNBC interview, suggesting younger investors view it differently than traditional assets.
Perhaps more significantly, Warsh has skin in the game. He was an early investor in crypto ventures, including the defunct algorithmic stablecoin project Basis and asset manager Bitwise. This direct exposure contrasts with the typical background of Fed leadership and suggests a foundational familiarity with the asset class.
Analysts are parsing the potential dual impact of a Warsh-led Fed. His monetary policy stance is considered hawkish, emphasizing credibility and warning against prolonged loose conditions—a headwind for liquidity-dependent assets like crypto. However, his willingness to engage with digital assets as a legitimate macroeconomic factor could lend long-term legitimacy to the sector.
"Markets are facing a paradox," said Markus Thielen of 10x Research. "Warsh's discipline-focused framework may pressure Bitcoin short-term, but his recognition of crypto as a permanent fixture could eventually reduce regulatory uncertainty."
The announcement followed a sharp, leveraged sell-off across digital assets. At press time, Bitcoin traded near $82,600, down 6% over 24 hours, with Ether and XRP posting similar declines. Derivatives data showed heightened activity, with over $1.8 billion in liquidations.
Market Voices: A Split Reaction
David Chen, Portfolio Manager at Horizon Capital: "This isn't about being 'pro-crypto.' It's about having a chair who actually understands the technology and its market structure. That's a net positive for sensible regulation, even if his first priority is taming inflation."
Rebecca Vance, Economist at the Brookings Institution: "The focus should remain on his academic and policy rigor regarding inflation and employment. His personal investments, while requiring careful ethical scrutiny, are a secondary concern for the role's core mandates."
Alex Rivera, Founder of CryptoFirst Advocacy Group: "This is a Trojan horse. The Wall Street old guard is co-opting our movement. Warsh's 'understanding' is just a softer path to the same restrictive oversight that stifles innovation. Don't be fooled by early investments—his policy instincts are orthodox and hostile to decentralized finance."
Priya Sharma, Senior Strategist at Apex Trading: "The immediate market reaction is pure volatility trading. The real story is institutional. Having a Fed chair who doesn't dismiss crypto out of hand could accelerate the maturation of custody, banking, and ETF markets over the next cycle."
This report includes original analysis and was informed by a story first published by TheStreet on January 30, 2026.