With traders on Polymarket betting on Kevin Warsh, Bitcoin price, as well as the crypto market sank recently after Donald Trump announced that he will deliver his Federal Reserve pick.
Traders on Polymarket and Kalshi are betting that Donald Trump will nominate Kevin Warsh to the next Federal Reserve Chair.
While the probability of Rick Rieder has dropped to 6%, data on Polymarket shows that the odds of Warsh have jumped to 92%.
The same is happening on Polymarket, similarly where the odds have jumped to the highest level on record, 91%.
After Reuters reported that Trump had met with Warsh on Thursday and was left impressed with him, the odds jumped.
Therefore, the most likely situation is where Trump will appoint a former Federal Reserve official, Warsh, to become the next chair. Citing its volatility, Warsh has historically voiced his opposition to cryptocurrencies.
Still, the Federal Reserve has had no major role in the crypto industry, historically. Its impact on the crypto industry has been mostly on monetary policy.
Bitcoin and the wider crypto market does well when the Fed is cutting interest rates and embracing other policies such as quantitative easing policies in most cases, as happened in the pandemic. Any Fed official that Trump will nominate will likely be supportive of interest rate cuts.
Yet, the challenge, is that the Fed Chair does not make the decision by himself. The Federal Open Market Committee (FOMC) consists of 12 voting members. For that reason, Governor Warsh will need to convince the other Fed officials to cut rates as Trump has proposed.
Moreover, Bitcoin is struggling as geopolitical risks in the Middle East rise. Trump threatened that he would attack Iran using the armada he has amassed in the region.
In the past recent months, the rising geopolitical risks explain why crude oil prices and gold have jumped. While gold has been in a strong uptrend, Brent has jumped to over $70 a barrel.
