At a White House event, Trump candidly told Hassett, "To be honest, I actually want you to stay on." This seemingly simple remark sent ripples through the financial markets.
Almost simultaneously, the price of Bitcoin fell below $93,000, dropping 1.27% on the day. The market’s sensitive reaction underscores how any changes in Federal Reserve leadership can impact global capital flows and the performance of risk assets.
01 Changing Candidates
Data from prediction market Kalshi revealed a dramatic shift. Kevin Hassett, the White House economic adviser who was previously seen as the frontrunner, saw his odds plunge from as high as 80% to just about 15%–16%.
Meanwhile, former Fed governor Kevin Warsh’s chances surged from around 11% in early December to 60%. Current Fed governor Christopher Waller and BlackRock executive Rick Rieder also made the shortlist but are trailing significantly.
Trump said bluntly, "I think both Kevins are great." However, he also expressed hesitation about nominating Hassett to succeed current Fed Chair Jerome Powell, openly stating he would prefer Hassett remain at the White House.
02 Market Impact
When news broke from the White House that the selection of the next Fed Chair might change, the crypto market reacted almost instantly.
As of January 19, Bitcoin’s price dropped to $92,678.63, down 2.62% in 24 hours. At the same time, the precious metals market told a different story, with spot gold breaking through several key levels and rising 2.06% on the day.
The market’s acute response to the Fed Chair selection highlights the profound influence of monetary policy on the future financial landscape. The contrasting performance of traditional safe-haven assets and crypto assets suggests investors are reassessing risk.
03 Candidate Analysis
Kevin Warsh brings extensive experience from both central banking and Wall Street. The 55-year-old former banking executive served as a Fed governor from 2006 to 2011 and was a key liaison between the central bank and Wall Street during the 2008 financial crisis.
Warsh is known for his hawkish stance on inflation, which could mean he favors keeping interest rates higher to control price increases. By contrast, Hassett faces skepticism due to his perceived close ties with Trump.
The market’s preference for Warsh partly stems from his expertise in financial stability and the prospect of policy continuity. However, Trump’s unpredictable approach to appointments leaves the final outcome uncertain.
04 The Political Arena
Current Fed Chair Jerome Powell’s term ends on May 15, with Treasury Secretary Scott Besant leading the selection process.
A criminal investigation by the U.S. Department of Justice into the Fed’s headquarters renovation project has added extra political complexity to the chairmanship race. Powell has accused the investigation of being an attempt to pressure the Fed into cutting rates.
Several key lawmakers, including Senate Banking Committee member Thom Tillis, have warned that Trump’s nominee will face heightened scrutiny.
05 Crypto Perspective
For crypto market participants, changes in Fed leadership could impact interest rate policy, dollar liquidity, and regulatory attitudes. Historically, a more hawkish Fed Chair typically signals a higher interest rate environment, which may reduce capital flows into risk assets.
Current Chair Powell has maintained a relatively open stance toward cryptocurrencies, having expressed support for digital currency innovation. Warsh’s position is less publicly known, adding to market uncertainty.
On Gate, market data from January 19 show Bitcoin prices remain volatile, with investors closely watching macro policy signals. Meanwhile, a new project, Immunefi, is launching on Gate Launchpad, aiming to provide comprehensive on-chain security solutions—highlighting the industry’s focus on foundational security infrastructure.
06 Investment Strategies
In a market environment where Fed leadership may change, crypto investors can consider several strategies.
Short-term volatility may increase, so it’s advisable to reduce leverage. According to CoinGlass data, about $534 million in positions were liquidated across the market in the past hour, with $514 million in long positions wiped out—demonstrating the vulnerability of high-leverage trades during volatile periods.
Focus on assets sensitive to monetary policy. Bitcoin is often viewed as a hedge against inflation and currency debasement, but in the short term, it may be affected by shifting interest rate expectations. Ethereum and other major cryptocurrencies may also experience correlated swings.
Consider diversifying your portfolio. On exchanges like Gate, investors have access to a wide range of crypto assets, including projects with low correlation to traditional financial markets, such as the Immunefi (IMU) project currently progressing on Gate Launchpad.
Outlook
The fortunes of Warsh and Hassett have risen and fallen with Trump’s remarks. Prediction markets have swung back and forth, ultimately settling with Warsh at about a 60% chance.
Treasury Secretary Besant confidently stated, "I’m not worried that the Senate will block whoever Trump ultimately nominates for Fed Chair." Still, the Senate’s rigorous vetting process is already underway.
Regardless of who ultimately leads the Fed, the market has already responded with price volatility. As of January 19, Bitcoin remains near $92,000, while gold has broken through multiple resistance levels.
