Kevin Warsh as Fed Chair: What does the end of the world of low rates mean for crypto?

Based on the latest information up to the end of January 2026, the likelihood of Kevin Warsh being appointed as Fed Chair is very high (around 85-87%). This is a notable scenario because his policy stance could cause significant volatility in the crypto market. Unlike officials who favor easing monetary policy, Warsh is known for his hawkish views and opposition to economic stimulus programs. The question is: could this shift end the “low rates” era that crypto has benefited from for many years?

If the Fed abandons easing policies: Liquidity will dry up, how will high-risk assets be pressured?

Kevin Warsh is one of the most typical hawkish candidates for Fed Chair. He has consistently opposed QE (quantitative easing) programs and supports a rapid reduction of the Fed’s balance sheet. This is in stark contrast to the policies of 2020-2021, when abundant liquidity created ideal conditions for Bitcoin and altcoins to surge.

If Warsh implements a world without low rates—instead adopting stricter inflation control policies—there will be successive consequences:

• Global liquidity will tighten: When the Fed raises or maintains high interest rates, investors will withdraw funds from high-risk assets like crypto to shift into USD or safe government bonds.

• The US dollar will strengthen: History shows Bitcoin often moves inversely to the USD index. When the dollar strengthens, Bitcoin and other digital currencies will face downward pressure.

• Price adjustments will occur: Based on historical cycles (especially in 2022 when the Fed began tightening), crypto could decline by 10-30%, depending on the actual strictness of the new policy.

This unique characteristic—the end of the low rates era—is seen by many analysts as the “end of the liquidity party” that crypto has enjoyed since 2008.

Kevin Warsh is not a “crypto enemy,” but his stance still exerts pressure

Interestingly, Kevin Warsh is not among officials who publicly criticize crypto like Powell or some other advisors. In fact:

• He has stated that Bitcoin could be a resilient store of value, similar to gold. Warsh also mentioned that crypto “does not worry him” (a relatively friendly view compared to many others).

• However, he remains skeptical about crypto volatility, criticizing it as early as 2018. Warsh is a supporter of CBDC (central bank digital currencies), especially wholesale types that could compete with stablecoins and private cryptos.

• Regarding regulation: Warsh might be somewhat more open than Powell toward banking and innovation sectors, but he is not a “crypto-friendly” figure like “Trump wanting low interest rates.”

Therefore, saying Warsh would be a friendly hand for crypto is not accurate, but he also does not pose a direct threat. The real danger comes from his tight monetary policy, not his personal attitude.

The market has already started reacting: Capital flows are moving out, what pressure is Bitcoin under?

As the probability of Warsh’s appointment surged (recently up to 85-87%), markets have begun to reprice:

• Dollar strengthening: A stronger USD is the clearest sign of fears about a world without low rates.

• Crypto under pressure: History shows that Fed tightening cycles tend to weaken Bitcoin’s price. As of Q4 2025, forecasts indicate that crypto has already begun slight corrections amid rumors of Warsh’s potential appointment.

• Volatility rising: With liquidity tightening, price swings will become more intense, prompting risk-averse investors to be more cautious.

Currently, Bitcoin is around $68,782 USD (down 2.06%), reflecting this uncertainty.

Long-term: If hawkish policies succeed in controlling inflation, there will be “consequences”

Not all news is bad. If Warsh successfully implements strict policies and keeps inflation in check, it could:

• Provide a more stable economic foundation for crypto to develop as a “digital gold” with a solid base.

• Reduce long-term volatility thanks to a predictable economic environment.

However, in the short term (2026-2027), downside risks outweigh the opportunities for gains. If you hold crypto, preparing for significant volatility is essential, especially if an official announcement confirms Warsh’s appointment.

An unpredictable factor is Trump’s influence on the independence of the Fed—which could alter any of the scenarios outlined above.