Bitcoin (BTC) may face “a few months” of downside as the new US Federal Reserve Chair takes over next month.
Key points:
- Bitcoin may follow risk assets downhill after Kevin Warsh takes over as Chair of the US Federal Reserve.
- President Donald Trump has said that he “would” be disappointed if an interest-rate cut did not occur in June.
- Wednesday marks current Chair Jerome Powell’s last rate decision.
Bitcoin price tends to fall after new Fed Chair enters
In its latest market coverage on X, crypto trading account CRYPTOWZRD warned that fresh downward BTC price pressure could return in June.
The Fed’s new Chair, Kevin Warsh, is due to take over from Jerome Powell — and the stakes are high when it comes to crypto and risk-asset performance.
“Every time a new FED Chair takes over $BTC has corrected for a few months before the real fun began,” CRYPTOWZRD noted.
“Can it break the curse or a final dip?”
BTC/USD one-month chart with Fed Chair appointments. Source: CRYPTOWZRD/X
History shows that a change of management at the Fed pressures stocks as well — but this year, the S&P 500 is at all-time highs as it happens.
The picture is complicated by politics. Powell avoided cutting interest rates — a would-be bullish catalyst for crypto — even as US President Donald Trump publicly shamed him for not doing so.
In an interview with CNBC last week, Trump said that he “would” be disappointed if Warsh did not cut rates at his first Federal Open Market Committee (FOMC) meeting in June.
Powell’s last FOMC meeting is due on Wednesday, with markets unanimously seeing rates being held at current levels, per data from CME Group’s FedWatch Tool.
Fed target rate probabilities for April 29 FOMC meeting (screenshot). Source: CME Group
Warsh gives traders mixed signals on policy
Continuing, crypto market participants see potential tailwinds for Bitcoin and altcoins thanks to US macro trends.
Related: Bitcoin Bull Score hits six-month high as 2022 bear-market fears linger
The Fed has begun adding to its balance sheet this year — a form of liquidity catalyst that traditionally benefits markets.
“That’s right, the Fed has added ~$200B of US Treasuries back onto its balance sheet in the last few months,” Bitcoin Opportunity Fund partner James Lavish wrote on the day.
“So much for tightening the money supply. QT is officially over. QE-light is in the house.”
Fed balance-sheet data. Source: James Lavish/X
In recent YouTube content, meanwhile, Charlie Bilello, chief market strategist at wealth manager Creative Planning, revealed what he called a “contradiction” in Warsh’s plans.
While “building the case” for rate cuts, he said, Warsh has been critical of the Fed keeping rates low during the post-COVID-19 inflation surge in 2021 and 2022.
“It was a ‘fatal policy error’ that was what he was saying back then, and I would agree with that,” Bilello said.
Warsh has also criticized balance-sheet expansion, raising questions over the fate of the 2026 uptrend.