Bitcoin Declines as Kevin Warsh's Fed Chair Prospects Rise

Bitcoin's value has dropped significantly, nearing $81,000, amid increasing speculation that Kevin Warsh may become the next Federal Reserve Chair. According to Odaily, Markus Thielen, founder of 10x Research, noted that the market views Warsh's potential appointment as a negative factor for Bitcoin. This is due to Warsh's emphasis on monetary discipline, higher real interest rates, and tighter liquidity, which align with his policy framework that considers crypto assets as speculative products of a loose monetary environment rather than tools to hedge against currency devaluation. Higher real interest rates, which reflect the true cost of financing after inflation, typically suppress demand for risk assets, including Bitcoin. Additionally, several observers believe that Warsh's hawkish stance and underestimation of deflation risks may have exacerbated economic downturn pressures in the past. If similar policies are adopted, it could lead to higher unemployment, slower recovery, and increased deflation risks.