#FedLeadershipImpact

Bitcoin (BTC) is experiencing significant volatility in early February 2026, largely influenced by the nomination of Kevin Warsh as the next Federal Reserve Chair (to replace Jerome Powell in May 2026). As of early February 4, BTC is trading in the $75,000–$76,500 range, with intraday lows around $72,884 (the lowest since November 2024) and highs approaching $77,110. This represents a ~40% decline from the October 2025 ATH of ~$126,000, marking one of the most severe corrections since the 2022 bear market. Ethereum (ETH) and other altcoins have fallen even harder, with major liquidations exceeding $2B–$2.5B in the past few days.
Why BTC Dropped: Warsh Nomination Impact
Markets reacted sharply to Warsh’s nomination because of his hawkish monetary stance.

Historically, Warsh favors:
Inflation control and tighter monetary policy
Smaller Fed balance sheet with faster quantitative tightening (QT)
Less prolonged easy money/QE
Investors interpreted this as a signal for “higher for longer” interest rates and a reduced “Fed put” for risk assets. BTC, highly sensitive to liquidity, dropped 10–17%+ immediately after the news, triggering leveraged unwinds, ETF outflows, and extreme fear in sentiment indexes. Short-term pressure also came from geopolitical/economic uncertainty, tech stock selloffs, and thin weekend liquidity.
Kevin Warsh’s Nuanced Views on Bitcoin
Despite the initial market panic, Warsh has expressed constructive and nuanced views on

Bitcoin over the years:
Bitcoin as a “policeman for policy”: He sees BTC as a tool signaling when central banks or fiscal authorities are mismanaging policy. Its price movements can provide valuable market discipline.

“New gold” for younger generations: Warsh considers Bitcoin a sustainable store of value, especially for people under 40, offering an alternative to physical gold.
Not a threat to the dollar: He has said Bitcoin “does not make me nervous” and is more a technological innovation than a replacement for fiat.
Technological innovation: Warsh admires BTC’s blockchain and scarcity properties and distinguishes it from many overvalued altcoins.
Pragmatic exposure: Warsh has indirect crypto experience (e.g., early investor in Basis, advising crypto-focused firms), signaling practical interest rather than hostility.

In short, Warsh is not anti-crypto; he sees BTC as a market signal and generational asset. However, his historical hawkish stance—prioritizing inflation control and balance-sheet discipline—caused short-term panic among investors, who fear tighter liquidity will hit speculative assets like Bitcoin.
Outlook
Short-term: BTC may remain volatile. Key levels to watch:
Support: $74k–$76k (bounce potential)
Resistance: $79k–$80k
Break below $73k could lead to deeper correction toward $70k

Longer-term: If Warsh supports productivity and growth (e.g., via AI/tech innovation) while maintaining Fed independence, BTC could rebound, potentially toward $100k+ by the end of 2026. Historical patterns show corrections like this often shake out weak hands, creating healthier market conditions for the next leg up.
Bottom line: The Warsh nomination triggered a major risk-off selloff, pushing BTC into the mid-70k range, but his nuanced stance on crypto suggests the long-term outlook may not be negative. BTC is being tested as a “store of value” without easy Fed liquidity, and upcoming FOMC signals, Warsh Senate hearings, ETF flows, and USD strength will shape its path.
This combined post keeps the market impact, Warsh’s crypto views, and short- vs. long-term outlook together in a clear narrative.