Bitcoin slid below the $80,000 support level on Wednesday as markets absorbed the confirmation of Kevin Warsh as the next Federal Reserve chair and a fresh hot inflation reading that scrambled rate-cut expectations. Warsh, who has called Bitcoin 'the new gold for people under 40' and is the first Fed chair to personally own crypto, is considered one of the more hawkish voices on quantitative easing. President Trump wants him to cut interest rates immediately, but after this week's CPI data, traders now see roughly 39% odds of a rate hike — not a cut.
What Warsh's confirmation means
Warsh's ascent marks a sharp shift in tone at the Fed. He's a known hawk on quantitative easing and has signaled that 3.8% inflation is unacceptable. Markets largely expect the Fed to hold rates at 3.50%–3.75% at the next FOMC meeting — CME FedWatch puts the probability at about 70%. A 25 basis point cut is priced at roughly 28%. If Warsh signals the Fed will hold longer because of stubborn inflation, Bitcoin could slip below $78,000, which is the 200-day moving average.
Rate cut odds and scenarios
A surprise cut — still a 28% chance — could push Bitcoin toward $85,000–$88,000. A more constructive scenario: if Warsh argues that AI productivity justifies rate cuts despite the hot CPI, Bitcoin could rebound toward $82,000–$85,000. But the revised dot plot due at the June meeting could show fewer cuts for 2026, and that scenario would likely push Bitcoin below $78,000. The timing isn't great for bulls. The hot CPI reading scrambled what had been a steady narrative of disinflation.
The next concrete event is the FOMC meeting in June, where the dot plot and Warsh's first official press conference as chair will set the tone for the rest of the year. Markets will be watching closely to see whether Warsh follows Trump's call for immediate rate cuts or sticks to his hawkish roots. Either way, Bitcoin is caught in the crossfire between a crypto-friendly chair and a macro environment that isn't cooperating.
