What Trump’s Fed Pick Kevin Warsh Means for Crypto

U.S. President Donald Trump nominated financier and former Federal Reserve governor Kevin Warsh to succeed Jerome Powell as Chair of the country’s central bank on Friday, a choice that lands as cryptocurrency markets slide and investors reassess the outlook for interest rates.

Announcing the pick on Truth Social, Trump praised Warsh’s credentials and record, calling him a future “GREAT Fed Chairman” and signaling an end to months of public conflict with Powell. The president has repeatedly criticized the Fed chair over interest-rate policy and the cost of the central bank’s headquarters renovation, even after the Fed delivered a series of rate cuts late last year.

The nomination comes during a turbulent stretch for digital assets. Bitcoin fell sharply this week, sliding from a recent high near $90,400 to about $82,800, according to CoinGecko data, declining 7% over the past week. The broader crypto market has weakened alongside it, with investors pulling back from riskier assets as expectations around the pace of future Fed easing shift.

The Fed’s decisions matter for crypto markets because digital assets tend to behave like so-called risk-on investments. When interest rates are high, safer yields such as U.S. Treasurys become more attractive, drawing capital away from volatile assets like cryptocurrencies. Lower rates, by contrast, increase liquidity in the financial system and often push investors toward higher-risk bets. A stronger dollar, typically associated with tighter Fed policy, has also historically weighed on Bitcoin prices.

But the impact of Fed decisions on Bitcoin’s price are not always logical. “Bitcoin consistently dropped after Fed announcements, regardless of the actual policy decision—a phenomenon known as ‘selling the news,’” explained a report from CoinGecko.

“Bitcoin only rallied after 1 out of 8 [Federal Open Market Committee] meetings in 2025, even during a cutting cycle that should theoretically benefit risk assets,” it added, referring to the committee at the Federal Reserve that makes decisions about interest rates.

Trump’s choice of Warsh follows years of tension between the White House and Powell. Since Powell’s confirmation in 2018, Trump has pressed the Fed to cut rates more aggressively and has accused the central bank of undermining economic growth. That pressure intensified last year, when the Justice Department subpoenaed Powell over the Fed’s construction project, a move Powell described as a pretext to influence monetary policy. Warsh himself added to the debate in a CNBC interview last summer, calling for “regime change” at the Fed.

Warsh is seen as more hawkish than Powell, especially given his past criticism of quantitative easing and the Fed’s balance sheet expansion, according to Shady El Damaty, CEO and co-founder at Holonym. “That’s raising concern about how aggressive he might be with rate policy if inflation ticks up again. For crypto, the real issue is uncertainty right now, nobody knows if he’d follow through on those views, especially in an election year where pressure to maintain liquidity will be intense,” he told Decrypt.

“If markets stay skittish, it could slow risk-on flows into crypto in the short term,” El Damaty added, noting that in the longer term, more hawkish Fed leadership “may actually strengthen the crypto narrative, especially for Bitcoin, as a hedge against tightening and centralized monetary control.”

Kevin Warsh and crypto

Warsh, 55, is a former investment banker who served on the Fed’s Board of Governors from 2006 to 2011, becoming the youngest governor in the institution’s history. He later advised the Bank of England on monetary-policy reforms and is now affiliated with the Hoover Institution and Stanford Graduate School of Business, while also working at Duquesne Family Office alongside investor Stanley Druckenmiller.

His views on cryptocurrency have been mixed. In a 2022 opinion essay, Warsh argued that many private crypto projects were “fraudulent” and “worthless,” writing that cryptocurrency was a misnomer because it was “software, not money.”

He also expressed support for the creation of a central bank digital currency (CBDC) as a response to China’s e-yuan, a move at odds with Trump and Republicans’ attitudes. He warned that China’s digital yuan posed a strategic threat to the U.S.-led financial system and backed the development of a wholesale digital dollar for use among financial institutions and governments.

“Kevin Warsh made an impassioned argument for a CBDC in one of the biggest newspapers in the world,” Nick Anthony, policy analyst at the Cato Institute’s Center for Monetary and Financial Alternatives, told Decrypt.

“Backtracking will either mean an admission that he was wrong about the problem or wrong about the solution. Either case is not good for his potential standing as the chair of the Federal Reserve.”

He also backed CBDCs over stablecoins, and criticized the Biden administration for promoting them. The Trump family has since launched its own stablecoin, USD1, through World Liberty Financial.

“I am skeptical that a host of private cryptocurrencies are sufficiently strong and reliable proxies for the U.S. dollar,” Warsh wrote.

“I also doubt that bank-like regulation of private stablecoins would ensure their stability in stressful times, absent government bailouts.”

More recently, Warsh has struck a more conciliatory tone toward Bitcoin. In an interview last May at the Hoover Institute, he said Bitcoin “does not make me nervous” and described it as an important asset that can serve as a check on policymakers.