The rising probability of Kevin Warsh becoming Federal Reserve Chairman has fueled market concerns that a "return to monetary discipline" could negatively impact Bitcoin.

Bitcoin fell further, nearing $81,000, as prediction markets surged on the probability of Kevin Warsh becoming the next Federal Reserve Chairman. Markus Thielen, founder of 10x Research, pointed out that the market generally views Warsh's regained policy influence as a negative factor for Bitcoin. This is because he has long emphasized monetary discipline, higher real interest rates, and tighter liquidity, and his policy framework tends to view crypto assets as "speculative products of a loose monetary environment" rather than tools for hedging against currency depreciation. Higher real interest rates mean that the real cost of financing increases after adjusting for inflation, which typically suppresses demand for risk assets, including Bitcoin. Furthermore, many observers believe that his hawkish stance and underestimation of deflation risks may have exacerbated downward economic pressures in the past; continuing with a similar approach could lead to higher unemployment, a slower recovery, and a greater risk of deflation. (CoinDesk)