US Fed Chair declares tightening...What changes will the new chair, who holds Bitcoin, bring?

▲ Kevin Warsh / Source=Federal Reserve History

Kevin Warsh, nominated by US President Donald Trump as the next Federal Reserve Chairman, is emphasizing a liquidity tightening stance, creating tension across the virtual asset market.

According to a report by crypto media outlet Cryptopotato on April 22 (local time), Warsh attended a Senate confirmation hearing and mentioned the necessity of quantitative tightening, focusing on reducing the Federal Reserve's balance sheet and absorbing liquidity. Warsh diagnosed that "the era of unlimited liquidity supply has entered its final phase" and stressed the need to normalize the asset market structure.

Signals of liquidity tightening have complex effects on the virtual asset market. Reduced liquidity could slow down the inflow of funds into Bitcoin (BTC) and major altcoins, which are classified as risky assets. On the other hand, the fact that Warsh holds a virtual asset portfolio worth $130 million complicates market interpretations.

Warsh evaluates Bitcoin as a key indicator showing the precursor to inflation and recognizes it as a signal for reading macroeconomic trends. There is also an analysis that while liquidity contraction may cause short-term price adjustments, it will serve as an opportunity to strengthen its position as a store of value in the long term.

Currently, Bitcoin is moving around the $79,000 mark and attempting to break through $80,000. In April alone, approximately $2 billion flowed into Bitcoin spot ETFs, maintaining a solid supply and demand base. If the policy direction proposed by Warsh leads to inflation suppression and restoration of financial trust, the speed of institutional capital inflow is expected to accelerate.

Warsh's nomination as Federal Reserve Chairman could be a significant turning point in the process of the virtual asset market's incorporation into the mainstream financial system. With policies based on an understanding of digital assets being proposed, Bitcoin's status as a macro asset is further highlighted.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*