Investors Assess New Fed Chair Kevin Warsh’s Monetary Policy Direction

TheNewsCryptoPublished on 2026-05-25Last updated on 2026-05-25

Abstract

Bitcoin remains under pressure, trading just below $78,000, as markets assess the monetary policy direction of new Federal Reserve Chair Kevin Warsh. Despite his past support for Bitcoin and criticism of central bank digital currencies, his early tenure has seen a sharp rise in the 2-year US Treasury yield to 4.14%, a key indicator of future policy expectations. This move suggests markets anticipate a shift away from aggressive rate cuts, with futures pricing in a potential rate hike by December. Higher yields and borrowing costs typically challenge speculative assets like Bitcoin by diminishing their liquidity appeal. Analysts caution that while Warsh is seen as innovative, his regulatory approach could still pose headwinds for digital assets.

Even if Kevin Warsh is now the chairman of the Federal Reserve, Bitcoin has been under pressure below $78,000 because traders are still concentrating on increasing Treasury rates and the low likelihood of short-term rate reduction.

Bitcoin and Risk Assets Remain Under Strain

Less than 24 hours after being inaugurated in as the new head of the Federal Reserve, Warsh—who has previously spoken out in favor of Bitcoin and against digital currencies issued by central banks—suffered a fall. Bond markets also saw a sudden shift that some predicted may be bad news for risk assets like cryptocurrency. At the time of writing, Bitcoin is trading at $77,498, up 0.24% in the last 24 hours as per data from CMC.

In spite of the Federal Reserve’s target rate being between 3.50% to 3.75%, the 2-year US Treasury yield rose to 4.14%, its highest level since February 2025. The 2-year yield is a good indicator of market sentiment about future monetary policy, thus traders saw this change as evidence that Warsh is moving away from aggressive easing.

According to CME FedWatch data, futures markets are bracing for a 25-basis-point rate rise by December, with rates expected to stay mostly stable for the most of 2026.

In response to market expectations of impending tighter monetary policy, the Federal Reserve has historically increased rates on many occasions when the 2-year Treasury yield surpassed the federal funds rate, according to historical data provided by BCA Research.

Yields that fell below the Fed funds rate in prior cycles often indicated that people were expecting the Fed to ease policy in the near future. Since increased borrowing costs and greater actual returns on government debt might diminish demand for speculative assets, higher yields tend to undermine Bitcoin’s liquidity-driven narrative.

For all the praise Warsh has received for his views on financial innovation and CBDCs, experts have cautioned that digital assets might still face challenges from his legislative approach.

Highlighted Crypto News Today:

US Spot Bitcoin ETFs Near Yearly Outflow Territory

TagsAltcoinBitcoinFederal Reserve

Related Questions

QWhy has Bitcoin been under pressure despite the appointment of the new Fed Chair Kevin Warsh?

ABitcoin has been under pressure because traders are focusing on rising Treasury yields and the low probability of short-term interest rate cuts.

QWhat recent change in the 2-year US Treasury yield is significant, and what does it indicate about market expectations?

AThe 2-year US Treasury yield rose to 4.14%, its highest level since February 2025. This rise is significant as it indicates the market expects the new Fed Chair, Kevin Warsh, to move away from aggressive monetary policy easing.

QAccording to the article, what do futures markets currently expect regarding the Federal Reserve's interest rate policy by December?

AAccording to CME FedWatch data, futures markets are bracing for a 25-basis-point interest rate increase by December, with rates expected to remain mostly stable for most of 2026.

QHow do higher Treasury yields, particularly when they surpass the federal funds rate, historically impact the Federal Reserve's actions and speculative assets like Bitcoin?

AHistorically, when the 2-year Treasury yield surpasses the federal funds rate, it has often led the Federal Reserve to increase rates. Higher yields increase borrowing costs and offer greater returns on government debt, which can diminish demand for speculative, liquidity-driven assets like Bitcoin.

QWhat potential challenge does the article mention for digital assets under Kevin Warsh's leadership, despite his favorable views on financial innovation?

AExperts caution that digital assets might still face challenges from Kevin Warsh's legislative approach, even though he has spoken favorably about Bitcoin and against central bank digital currencies (CBDCs).

Related Reads

CPU, Quietly Returning to the Center of the AI Computing Power Stage

Over the past three years, AI computing power narratives have been dominated by GPUs. However, starting in 2026, this story began to shift. While training large models remains GPU-intensive, the rapid growth of inference and AI agent workloads, which require high levels of task orchestration, concurrency, and data flow management, has highlighted a renewed critical role for CPUs. These are tasks GPUs are not designed to handle. Intel's recent launch of the Xeon 6+ processor, built on its Intel 18A process and featuring up to 288 efficiency cores (E-cores), exemplifies this strategic pivot. It is positioned not as a mere companion to GPUs but as the essential "control plane" for AI infrastructure, optimized for high-density, energy-efficient, and high-throughput workloads characteristic of AI agents and inference. This "CPU resurgence" is not about CPUs outperforming GPUs in raw computation. It reflects a systemic bottleneck: as AI scales from training single models to deploying countless intelligent agents, the demand for coordination and data handling surges. Major cloud providers are also developing their own high-density ARM-based server CPUs for similar workloads. However, Intel's success with this strategy faces significant challenges. Competition includes NVIDIA's integrated CPU-GPU solutions, the expanding adoption of cloud vendors' in-house ARM CPUs, and the crucial market test of Intel's 18A manufacturing process against rivals like TSMC's N2. In conclusion, CPUs are indeed reclaiming a central, though redefined, role in AI compute—managing the complex orchestration that enables massive-scale AI deployment. While the trend is clear, which company will ultimately lead this CPU resurgence remains an open question to be decided in the data centers of 2027 and beyond.

marsbit14m ago

CPU, Quietly Returning to the Center of the AI Computing Power Stage

marsbit14m ago

After Collaborating with 35+ DeFi Projects, Pink Brains Discovers the New 2026 KOL Marketing Rules

After collaborating with over 35 leading DeFi projects on marketing over three years, Pink Brains identifies a key shift for effective marketing in 2026: prioritizing the user journey over traditional campaign tactics. The most effective marketing mirrors how users actually behave—starting with discovery on social platforms like X (formerly Twitter), followed by data-driven verification on sites like DefiLlama, and finally, participation with small test funds. Success hinges on genuine, verifiable mechanisms, not just marketing hype. Current user interest centers on several key themes: new DeFi trends (RWA, perps, crypto x AI), meaningful airdrops requiring real contributions, real yield from protocol revenue, and tokens with value capture mechanisms directly tied to product usage. Case studies like Hyperliquid's HYPE (with its aggressive buyback program) and Venice's VVV (linking demand to AI compute) exemplify how strong tokenomics foster user retention. New trading venues like prediction markets, collectibles platforms, and GambleFi are also gaining traction, driven by verifiable activity. The article outlines common mistakes in DeFi KOL marketing, such as using creators unfamiliar with the product, generic messaging, or relying on a few top-tier KOLs. Instead, effective strategies align with different KOL types—educators, content creators, airdrop hunters, and niche experts—for various stages of the user journey. Ultimately, long-term user retention depends on a combination of a genuinely useful product, responsive support, community-aligned tokenomics, and strategic community building. The core takeaway is that sustainable growth stems from products whose value is validated by data and real-world utility, not just promotional efforts.

marsbit32m ago

After Collaborating with 35+ DeFi Projects, Pink Brains Discovers the New 2026 KOL Marketing Rules

marsbit32m ago

Trading

Spot
Futures

Hot Articles

What is $BITCOIN

DIGITAL GOLD ($BITCOIN): A Comprehensive Analysis Introduction to DIGITAL GOLD ($BITCOIN) DIGITAL GOLD ($BITCOIN) is a blockchain-based project operating on the Solana network, which aims to combine the characteristics of traditional precious metals with the innovation of decentralized technologies. While it shares a name with Bitcoin, often referred to as “digital gold” due to its perception as a store of value, DIGITAL GOLD is a separate token designed to create a unique ecosystem within the Web3 landscape. Its goal is to position itself as a viable alternative digital asset, although specifics regarding its applications and functionalities are still developing. What is DIGITAL GOLD ($BITCOIN)? DIGITAL GOLD ($BITCOIN) is a cryptocurrency token explicitly designed for use on the Solana blockchain. In contrast to Bitcoin, which provides a widely recognized value storage role, this token appears to focus on broader applications and characteristics. Notable aspects include: Blockchain Infrastructure: The token is built on the Solana blockchain, known for its capacity to handle high-speed and low-cost transactions. Supply Dynamics: DIGITAL GOLD has a maximum supply capped at 100 quadrillion tokens (100P $BITCOIN), although details regarding its circulating supply are currently undisclosed. Utility: While precise functionalities are not explicitly outlined, there are indications that the token could be utilized for various applications, potentially involving decentralized applications (dApps) or asset tokenization strategies. Who is the Creator of DIGITAL GOLD ($BITCOIN)? At present, the identity of the creators and development team behind DIGITAL GOLD ($BITCOIN) remains unknown. This situation is typical among many innovative projects within the blockchain space, particularly those aligning with decentralized finance and meme coin phenomena. While such anonymity may foster a community-driven culture, it intensifies concerns about governance and accountability. Who are the Investors of DIGITAL GOLD ($BITCOIN)? The available information indicates that DIGITAL GOLD ($BITCOIN) does not have any known institutional backers or prominent venture capital investments. The project seems to operate on a peer-to-peer model focused on community support and adoption rather than traditional funding routes. Its activity and liquidity are primarily situated on decentralized exchanges (DEXs), such as PumpSwap, rather than established centralized trading platforms, further highlighting its grassroots approach. How DIGITAL GOLD ($BITCOIN) Works The operational mechanics of DIGITAL GOLD ($BITCOIN) can be elaborated on based on its blockchain design and network attributes: Consensus Mechanism: By leveraging Solana’s unique proof-of-history (PoH) combined with a proof-of-stake (PoS) model, the project ensures efficient transaction validation contributing to the network's high performance. Tokenomics: While specific deflationary mechanisms have not been extensively detailed, the vast maximum token supply implies that it may cater to microtransactions or niche use cases that are still to be defined. Interoperability: There exists the potential for integration with Solana’s broader ecosystem, including various decentralized finance (DeFi) platforms. However, the details regarding specific integrations remain unspecified. Timeline of Key Events Here is a timeline that highlights significant milestones concerning DIGITAL GOLD ($BITCOIN): 2023: The initial deployment of the token occurs on the Solana blockchain, marked by its contract address. 2024: DIGITAL GOLD gains visibility as it becomes available for trading on decentralized exchanges like PumpSwap, allowing users to trade it against SOL. 2025: The project witnesses sporadic trading activity and potential interest in community-led engagements, although no noteworthy partnerships or technical advancements have been documented as of yet. Critical Analysis Strengths Scalability: The underlying Solana infrastructure supports high transaction volumes, which could enhance the utility of $BITCOIN in various transaction scenarios. Accessibility: The potential low trading price per token could attract retail investors, facilitating wider participation due to fractional ownership opportunities. Risks Lack of Transparency: The absence of publicly known backers, developers, or an audit process may yield skepticism regarding the project's sustainability and trustworthiness. Market Volatility: The trading activity is heavily reliant on speculative behavior, which can result in significant price volatility and uncertainty for investors. Conclusion DIGITAL GOLD ($BITCOIN) emerges as an intriguing yet ambiguous project within the rapidly evolving Solana ecosystem. While it attempts to leverage the “digital gold” narrative, its departure from Bitcoin's established role as a store of value underscores the need for a clearer differentiation of its intended utility and governance structure. Future acceptance and adoption will likely depend on addressing the current opacity and defining its operational and economic strategies more explicitly. Note: This report encompasses synthesised information available as of October 2023, and developments may have transpired beyond the research period.

363 Total ViewsPublished 2025.05.13Updated 2025.05.13

What is $BITCOIN

Discussions

Welcome to the HTX Community. Here, you can stay informed about the latest platform developments and gain access to professional market insights. Users' opinions on the price of BTC (BTC) are presented below.

活动图片