Trump is making early preparations for the next Federal Reserve Chair, with five candidates emerging as frontrunners. This personnel change is gripping the nerves of every cryptocurrency investor.
I. The Top Five: Who Will Lead the Federal Reserve?
On Monday, U.S. President Trump stated that he may announce his nominee to replace Federal Reserve Chair Powell by the end of the year, as Powell’s current term will end in May next year.
U.S. Treasury Secretary Besant revealed to reporters aboard Air Force One that the list of candidates has been narrowed down to five finalists.
This personnel decision is closely watched by the crypto market because the new Fed Chair’s monetary policy stance will directly impact the global liquidity environment, thereby affecting the price trends of risk assets such as cryptocurrencies.
The five confirmed candidates are:
● White House National Economic Council Director Kevin Hassett
● Former Federal Reserve Governor Kevin Warsh
● Current Federal Reserve Governor Christopher Waller
● Current Federal Reserve Vice Chair for Supervision Michelle Bowman
● BlackRock Senior Executive Rick Rieder
II. Analysis of Candidates’ Policy Stances
Candidate | Current Position/Background | Main Policy Inclinations & Background |
Kevin Hassett | White House National Economic Council Director | Close relationship with Trump, highly aligned stance, has publicly criticized Powell for being “slow to act” on rate cuts |
Kevin Warsh | Former Federal Reserve Governor | Once the youngest Fed Governor, called for “institutional reform” of the Fed, advocates for aggressive balance sheet reduction to create room for rate cuts |
Christopher Waller | Current Federal Reserve Governor | Nominated by Trump, first Fed Governor in 2025 to call for resuming rate cuts. Advocates for central bank independence but supports internal reforms |
Michelle Bowman | Current Federal Reserve Vice Chair for Supervision | Nominated by Trump, comes from a banking family, led the relaxation of bank capital rules, and is one of the earliest officials this year to support rate cuts |
Rick Rieder | BlackRock Senior Executive | Responsible for fixed income business, has extensive financial market experience, has advocated for the Fed to cut rates more aggressively (by 50 basis points), while emphasizing central bank independence |
This statement clearly indicates Trump’s demand—he hopes the Federal Reserve will implement a more accommodative monetary policy.
III. Multiple Impacts on the Crypto Market
The choice of the Federal Reserve Chair impacts the crypto market on three main levels:
Price and Trading Level
● Expectations of Easing Drive Price Rises. If a new Chair favoring rate cuts takes office, it may reinforce the market’s ongoing expectations of easing, increasing the appeal of high-risk assets such as cryptocurrencies.
Bitcoin often exhibits “expectation-driven rallies” ahead of monetary policy easing.
● Volatility May Intensify. Any news during the nomination and appointment process may trigger market sentiment swings. Special attention should be paid to the second round of interviews in November and the final nomination at the end of the year.
Capital and Liquidity
● Low Interest Rate Environment Favors Crypto Assets. The Fed cut rates by 25 basis points in September, and the market widely expects another 25 basis point cut at this week’s meeting. If the new Chair pushes for larger rate cuts, the global liquidity environment will further loosen, and some funds may flow into the crypto market seeking higher returns.
● The Key Impact of the U.S. Dollar Trend. A dovish Chair may lead to a weaker dollar, further boosting the prices of dollar-denominated cryptocurrencies.
Regulation and Industry Development
● Regulatory Attitude Determines Room for Growth. The new Chair’s stance on the crypto industry will affect the future regulatory framework. Kevin Warsh’s interest in central bank digital currency (CBDC) may accelerate discussions on a digital dollar.
● Indirect Impact of Bank Supervision. If Bowman, the current Vice Chair for Supervision, is elected, her attitude toward bank regulation may affect the compliance environment for crypto banks.
Impact Dimension | Short-term Impact (1-3 months) | Medium- to Long-term Impact (6+ months) |
Monetary Policy | Market expectation volatility, price fluctuations; BTC/ETH may swing 10-15% before FOMC meetings, speculators bet on 25-50 basis point rate cuts | Reshaping of interest rate path, changing asset pricing logic; new Chair may push for cumulative rate cuts of 100+ basis points by 2026, benefiting crypto valuation models (lower risk premium under DCF) |
Capital Flows | Speculative funds move in and out quickly; retail investors flock to DeFi/meme coins, institutions’ wait-and-see attitude leads to short-term risk of capital outflows | Institutional capital allocation strategy adjustment; pension funds/ETFs increase crypto exposure (target 10-20%), liquidity injection exceeds $50 billion |
Regulatory Environment | High policy uncertainty; Trump’s intervention signals amplify SEC uncertainty, short-term suppression of NFT/stablecoin innovation | Regulatory framework gradually clarifies; dovish Chair (such as Warsh) promotes crypto-friendly rules, CFTC leads stablecoin framework, benefits RWA tokenization |
IV. Market Views and Risk Warnings
The market as a whole is showing a cautiously optimistic sentiment. Investors generally expect that no matter who is elected, the Fed’s policy shift toward easing will not change, but they remain alert to market volatility during the transition period.
Expert Opinion Analysis
Crypto macro research firm “Digital Wave” analyst’s view:
● “If Trump appoints a more compliant Fed Chair like Hassett, we may see a faster rate cut path, which is a short-term positive for cryptocurrencies. But the long-term risk is that the Fed’s independence may be compromised, leading to policy reversals in the future.”
Chief strategist at blockchain investment firm ‘Frontier Capital’ believes:
● “The market should pay most attention to candidate Rieder. He comes from BlackRock and has a deep understanding of both traditional finance and emerging assets. He may find a balance between supporting innovation and maintaining stability, which is a long-term positive for the institutionalization of cryptocurrencies.”
Head of research at quantitative trading firm ‘Alpha Strategy’ points out:
● “If Waller is elected, the market may see a ‘Fed independence’ reversal trade. In this scenario, bitcoin may come under short-term pressure, but as the rate cut cycle is confirmed, the medium- to long-term outlook remains positive.”
Potential Risk Warnings
● Long-term risk of compromised Fed independence. Historically, the “Nixon pressuring Burns” incident severely damaged the Fed’s credibility. If the Fed is seen as politicized, it could trigger concerns about long-term inflation.
● Risk of policy uncertainty. Exceptionally early nominations have drawbacks, and Powell’s successor may face a dilemma. This uncertainty could increase market volatility in the short term.
● Risk of stricter regulation. Some candidates may take a more cautious stance on cryptocurrencies, leading to stricter regulatory measures.
Key Developments to Track in the Future
● Selection process timeline. Treasury Secretary Besant plans to conduct a second round of interviews in November and hopes to submit a more streamlined list to Trump after Thanksgiving. Trump said the final candidate will be announced by the end of the year.
● Senate confirmation hearings. Trump’s nominee will need Senate confirmation, which will provide more clues about their policy stance, especially regarding monetary policy direction and cryptocurrency regulation.
In the coming months, as the new Fed Chair candidate becomes clearer, the cryptocurrency market may undergo a repricing dominated by liquidity expectations. This personnel change is not only about who will lead the world’s most important central bank, but will also determine the direction of global liquidity in the coming years.
For the cryptocurrency market, grasping the differences between candidates’ policy stances and market expectations may be the key winning factor in the next round of the market.
