BlockBeats News, May 1, as Kevin Warsh is expected to take over as the new Chair of the Federal Reserve next month from Jerome Powell, historical patterns suggest that after each new Fed Chair takes office, Bitcoin typically goes through several months of price correction before it finally starts a “real rally.” The market is currently focused on whether this “curse” will be broken or if there will be a final dip.
At the same time, the macro environment is sending complex signals. Trump has already applied pressure to cut interest rates ahead of schedule. In an interview, former U.S. President Trump said that if Warsh does not cut rates in the first rate decision in June, he would be disappointed. The market widely expects that Powell’s last meeting during his tenure (this Wednesday) will keep interest rates unchanged.
Bitcoin Opportunity Fund partner James Lavish noted that over the past few months, the Federal Reserve has re-accumulated about $200 billion in U.S. Treasuries on its balance sheet, indicating that quantitative tightening (QT) has officially ended and that “lightweight QE” has arrived—potentially serving as a catalyst for risk assets.
However, Warsh himself previously criticized the Fed for maintaining low interest rates during 2021-2022 as a “deadly policy mistake,” and he held a negative view of balance-sheet expansion; there is an inherent contradiction in his policy stance. Analysts believe that Bitcoin and the stock market may face short-term volatility, but the shift in liquidity conditions could be paving the way for the subsequent market run.
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