"Hawkish Fed is coming"...Bitcoin, short-term pressure warning despite $80,000 recovery

▲ Bitcoin (BTC), Dollar (USD)

Bitcoin (BTC) showed signs of recovery, entering the $80,000 range for the first time since January, but the variable of Kevin Warsh, who is being discussed as the next Chairman of the U.S. Federal Reserve, has emerged as a key concern for investors. Bitcoinist reported on May 9 that Bitcoin had risen by approximately 13% over the past month, and that Warsh is expected to take office as Fed Chairman by May 15.

Bitcoinist stated that as Bitcoin and other risk assets react sensitively to macroeconomic events, the future direction of U.S. monetary policy could significantly impact market trends. CryptoQuant analyst XWIN Research Japan evaluated Warsh as a figure who presents an interesting policy combination for cryptocurrency investors.

Warsh is classified as a hawkish policymaker. A former Fed Governor and member of George W. Bush's economic team, he is regarded as someone focused on proactive inflation suppression. According to Bitcoinist, Warsh opposed the observation during a Senate hearing in late April that he had agreed to implement interest rate cuts after his appointment by U.S. President Donald Trump.

Warsh emphasized the Fed's independence in monetary policy decisions. This statement came amidst ongoing conflict between Trump, who has been pressuring for interest rate cuts, and current Fed Chairman Jerome Powell. Bitcoin saw a pullback to approximately $75,000 after Warsh's remarks. This was because expectations of liquidity flowing into risk assets like cryptocurrencies waned as hopes for interest rate cuts diminished.

XWIN Research Japan explained that Bitcoin has reacted significantly to changes in macroeconomic policy in recent years. It recorded a historic rally during the quantitative easing period from 2020 to 2021 and experienced a major price correction during the liquidity tightening phase in 2022. While Warsh's remarks indicated a stance of not rushing interest rate cuts immediately, other aspects of his views could be positively assessed by cryptocurrency investors.

During the Senate hearing, Warsh positively mentioned the development of digital assets, evaluating them as part of financial services. According to mandatory asset disclosure data, he maintains active contact with the cryptocurrency industry by investing in various projects. XWIN Research Japan reported that Warsh views Bitcoin as digital gold for the younger generation and believes Bitcoin can serve as a benchmark for digital asset regulation.

However, Warsh expressed considerable skepticism about altcoins. He reportedly described some altcoins as “software pretending to be money.” XWIN Research Japan believed that Warsh's hawkish policy preference could put short-term pressure on Bitcoin prices. Conversely, his understanding of cryptocurrencies, positive perception of Bitcoin, and opposition to the development of central bank digital currencies could contribute to long-term institutional trust.

Bitcoinist reported that the total cryptocurrency market capitalization was estimated at $2.65 trillion on a daily chart basis. The key points for Bitcoin investors to watch under a Warsh regime are the short-term liquidity pressure due to delayed interest rate cuts and the impact of his policy perception of Bitcoin as digital gold on long-term institutional demand.

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