The new Federal Reserve Chair to be announced next week! Is the crypto world迎来“Wash Shockwave”？

The global cryptocurrency market has never been so silent—The U.S. Department of the Treasury officially announced that Trump is expected to finalize the next Federal Reserve Chair candidate as early as next week. Among the four candidates, former Fed Governor Kevin Wash leads strongly with an astonishing 61% probability, far surpassing other contenders.

This 47-year-old financial elite, if appointed as Fed Chair, could bring an unprecedented policy hurricane to the cryptocurrency world. Wash’s policy stance contains hidden contradictions: it may satisfy Trump’s demand for rate cuts, yet he has also sharply criticized quantitative easing, advocating for balance sheet reduction and streamlining functions. Once implemented, this “rate cut + balance sheet reduction” policy combination will directly impact the global liquidity landscape.

Market Changes Under Dual Policies

Wash advocates for the Fed to return to traditional inflation control functions, divesting from non-core policy tools. This policy shift implies:

1. Short-term rate cut expectations may boost risk assets, including cryptocurrency market sentiment
2. The balance sheet reduction process will gradually tighten global dollar liquidity, posing long-term pressure on crypto markets reliant on liquidity

This contradictory combination creates an unprecedented market environment—signals of easing and tightening may coexist, traditional asset pricing logic faces reshaping, and as an emerging asset class, cryptocurrencies may be far more sensitive than traditional markets.

Historical Volatility Indicates Crypto Market Sensitivity

It’s worth noting that during the period when Wash’s chances of being elected increased, traditional markets already experienced intense volatility: U.S. stocks fluctuated, gold became more volatile, and the dollar index came under pressure. Such volatility often propagates to the crypto market in a very short time, with mainstream cryptocurrencies like Bitcoin often viewed as “digital gold” or risk sentiment indicators.

If Wash is elected, the following scenarios may unfold:

· Short-term: Rate cut expectations may drive some safe-haven funds into crypto markets
· Medium-term: Gradual fermentation of balance sheet reduction expectations, tightening global liquidity may suppress overall crypto valuations
· Structural impact: Changes in the dollar credit system could further highlight the alternative value of cryptocurrencies

Cryptocurrency’s Unique Positioning

In this potential policy shift, cryptocurrencies occupy a unique position:

On one hand, during the reshaping of traditional asset pricing logic, crypto assets may attract funds seeking non-correlation in their portfolios; on the other hand, changes in the global liquidity environment will directly affect market participants’ risk appetite and leverage capacity.

Especially under Wash’s advocacy for “streamlining Fed functions,” the development path of Central Bank Digital Currencies (CBDCs) may be impacted, further altering the competition landscape between public and private digital currencies.

Forward-looking Layout: Not Just Spectators

For crypto investors, this is not just an event in the traditional financial world. History shows that Fed policy shifts often trigger new asset rotations, and the crypto market is increasingly difficult to ignore.

Wash’s potential “rate cut + balance sheet reduction” combination actually creates a complex macro environment: on one side, interest rate signals encouraging risk-taking; on the other, gradually withdrawing liquidity support. In this environment, the fundamental narratives of cryptocurrencies may further differentiate—the projects with actual utility, cash flow, or scarcity guarantees may perform significantly differently from purely speculative assets.

As the final selection of the next Fed Chair is confirmed next week, the crypto market may need to recalibrate its assumptions about its correlation with traditional macro factors. This upcoming “Wash Shockwave” might be the key moment to test the maturity of cryptocurrencies as an asset class.

At this crossroads where traditional financial rules may be rewritten, cryptocurrencies are no longer just peripheral observers but are increasingly becoming important variables in global capital flows. Is the market ready? #Gate每10分钟送1克黄金 $BTC