President Trump officially nominated Kevin Warsh on Friday to replace Jerome Powell as Chair of the Federal Reserve when his term expires in May 2026.
Warsh, a former Fed governor and Morgan Stanley veteran, is historically viewed as a fiscal hawk, though he has recently aligned with Trump’s calls for lower interest rates.
The nominee has a background in the digital asset space, having served as an advisor to Bitwise and an early investor in the algorithmic stablecoin project Basis.
Bitcoin and broader markets reacted with volatility; BTC dipped toward $81,000 as investors weighed Warsh’s history of favoring monetary discipline and a smaller Fed balance sheet.
President Donald Trump announced on Friday via Truth Social his intention to nominate former Federal Reserve Governor Kevin Warsh to lead the U.S. central bank. The decision follows months of public tension between the White House and current Chair Jerome Powell, whom Trump has frequently criticized for maintaining high interest rates. Warsh, who served on the Fed board from 2006 to 2011, is expected to bring a “regime change” to the institution, focusing on monetary reform and a significant reduction of the Fed’s $7.5 trillion balance sheet.
In the cryptocurrency sector, Warsh’s nomination presents a complex profile for investors. Unlike many traditional economists, Warsh has engaged directly with the industry. He previously served as an advisor to crypto index fund Bitwise and was an angel investor in Basis, an algorithmic stablecoin project that shuttered in 2018 due to regulatory hurdles. While he has described Bitcoin as an important asset and a potential hedge against currency debasement, he has also referred to cryptocurrency more broadly as “software” rather than money, signaling a preference for clear regulatory frameworks and the possible development of a wholesale CBDC.
Market reaction to the news was swift and largely risk-off. Bitcoin fell over 3% to the $81,000 range as prediction market odds on Polymarket for Warsh’s nomination surged past 95%. Analysts at 10x Research noted that Warsh’s reputation for fiscal restraint and his past warnings about “speculative excess” during the 2008 financial crisis have made some traders nervous about future liquidity. However, proponents argue that his understanding of blockchain technology could lead to more sophisticated policy than the current administration’s approach.
“I have known Kevin for a long period of time and have no doubt that he will go down as one of the GREAT Fed chairmen, maybe the best,” Trump stated in his announcement, emphasizing Warsh’s experience in monetary policy and his ability to communicate complex economic shifts to the public. If confirmed by the Senate, Warsh will inherit an economy currently navigating a 3.5% to 3.75% interest rate environment and a contentious debate over the independence of the central bank.
The nomination now moves to the Senate Banking Committee. While Republicans hold the majority, some members, including Senator Thom Tillis, have expressed reservations about moving forward with any Fed confirmations until ongoing investigations into the central bank’s internal operations are resolved. This potential political deadlock could create further uncertainty for global markets and digital asset volatility heading into the second quarter of the year.
Disclaimer: This article is for informational purposes only and does not constitute advice of any kind. Readers should conduct their own research before making any decisions.
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