Trump picks Kevin Warsh for Fed chair, bitcoin drops

Crypto fell on potential Fed pick Warsh; his mentor advises markets took the news wrong.

  • Risk markets, including cryptocurrency, fell sharply following reports of Kevin Warsh’s potential nomination for Federal Reserve Chairman.
  • Billionaire investor Stanley Druckenmiller refutes the notion that Warsh is strictly hawkish, stating he’s seen him “go both ways.”
  • Druckenmiller highlights the ideal partnership between Warsh and prospective Treasury Secretary Scott Bessent, both of whom are his close associates.

Markets reacted with immediate volatility to a leaked report that former Fed Governor Kevin Warsh is President Trump’s choice to lead the Federal Reserve. Consequently, cryptocurrency prices tumbled, with Bitcoin briefly falling back to $81,000 on the news. However, Stanley Druckenmiller, a billionaire investor and close mentor to Warsh, challenged the prevailing market narrative in an interview with the FT on Friday.

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“The branding of Kevin as someone who’s always hawkish is not correct,” stated Druckenmiller. “I’ve seen him go both ways.” Druckenmiller, who has employed Warsh at his Duquesne Capital Management since 2011, speaks with him constantly. Meanwhile, Druckenmiller also has deep ties to Scott Bessent, Trump’s reported pick for Treasury Secretary, having hired him decades ago at the Quantum Fund.

This unique relationship triangle is seen as a major policy advantage. “I’m really excited about the partnership between [Warsh] and Bessent,” Druckenmiller said. He emphasized that an accord between the nation’s top monetary and fiscal officials is ideal for market stability. Their shared philosophy, shaped by Druckenmiller, was detailed in a Financial Times profile last year.

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