10x Research Warning: If Kevin Warsh takes charge of the Federal Reserve, it could be unfavorable for Bitcoin

Before President Trump officially nominates Kevin Warsh to serve as Federal Reserve Chair, 10x Research founder Markus Thielen has warned that Warsh, who has historically taken a hawkish stance, may exert pressure on risk assets such as cryptocurrencies if he takes the helm of the Fed.
(Background: Will Warsh push funds into Bitcoin? After Trump’s nomination, gold fell below $5,000, and BTC briefly rebounded to $83,700.)
(Additional context: Trump’s favored Fed Chair Kevin Warsh on Bitcoin: It’s not a dollar substitute, but a “supervisor” of monetary policy.)

Table of Contents

• Warsh’s nomination raises market concerns
• Rising real interest rates suppress risk assets
• Warsh’s past positions deepen market worries
• Potential conflicts between hawkish stance and Trump’s policy direction

President Trump has officially nominated Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair, with Powell’s term ending in May. The nomination was announced on January 30, 2026, but Warsh still needs Senate confirmation before taking office.

However, even before the official announcement, cryptocurrency research firm 10x Research founder Markus Thielen expressed strong concerns about Warsh potentially leading the Fed, believing his past hawkish monetary policy stance would be bearish for Bitcoin and other crypto assets.

Warsh’s nomination raises market concerns

Thielen pointed out that the market generally views Warsh’s appointment as a negative signal for Bitcoin. The reason is that Warsh has long emphasized monetary discipline, maintaining high real interest rates, and reducing market liquidity. Under this framework, cryptocurrencies are not seen as effective hedges against currency devaluation but rather as speculative excess products in a loose monetary environment. When tightening policies return, these assets are often the first to be impacted.

Rising real interest rates suppress risk assets

Thielen further explained that higher real interest rates (the actual borrowing cost after inflation) increase the real burden of debt. For businesses and investors, this means reduced attractiveness of risk investments, with high-volatility assets like Bitcoin typically the first to suffer.

Historically, whenever real interest rates rise significantly, risk appetite declines, and crypto markets often face substantial selling pressure.

Warsh’s past positions deepen market worries

Thielen specifically mentioned Warsh’s stance during the 2007-2009 global financial crisis, when he repeatedly emphasized inflation risks even as the economy was nearing deflation. For example, in September 2008, after Lehman Brothers collapsed, Warsh expressed reluctance to abandon concerns about inflation; in the following year, with inflation at only 0.8% and unemployment at 9%, he remained more worried about inflation rising than falling. Many observers believe this hawkish attitude could prolong the crisis, increase unemployment, and amplify deflationary pressures in the 2010s.

Thielen summarized that if Warsh leads the Fed, his policy orientation could result in a slower economic recovery and higher unemployment risks, posing a significant challenge for crypto markets that rely on liquidity support.

Potential conflicts between hawkish stance and Trump’s policy direction

Interestingly, Warsh’s hawkish stance contrasts sharply with Trump’s consistent advocacy for rapid rate cuts. Trump has repeatedly criticized Powell for maintaining high interest rates that drag on the economy and has even called for rates to be lowered to around 1%. Thielen believes that markets have already priced in the possibility that Warsh, if appointed, may find it difficult to fully align with Trump’s dovish expectations, further fueling investor doubts about the outlook for crypto assets.

Although the Federal Reserve Chair cannot unilaterally set interest rates (requiring collective voting by the Board of Governors), Warsh’s historical positions could influence market sentiment in the short term, boosting the dollar and suppressing risk assets. The confirmation process in the Senate and Warsh’s actual policy stance may become key variables in determining the future direction of the crypto market.