Powell Resigns · Waller Takes Over: Liquidity Turning Point Approaching in Crypto

On May 15, Powell officially stepped down as Federal Reserve Chair, with Kevin Waller taking the helm. His eight-year term concludes— the pandemic's aggressive monetary easing fueled an epic bull market in the crypto space, followed by aggressive rate hikes suppressing inflation, with core PCE still hovering around 3.3%. Powell remains on as a board member until 2028, breaking a 75-year tradition, and the Federal Reserve enters a rare "dual leadership" pattern.
Waller is characterized as a "discipline-oriented" member, disliking the normalization of quantitative easing. He advocates for a combination of rate cuts and balance sheet reduction—slightly easing rates to meet White House demands and alleviate debt pressure, while aggressively shrinking the balance sheet to withdraw excess liquidity. This approach creates complex impacts on the crypto market: balance sheet reduction directly drains market liquidity, risking assets most; but Waller publicly positions Bitcoin as "digital gold reserves," describing it as "the new gold for people under 40," an unprecedented view among Fed officials. A stark contrast in history: after Waller's nomination was announced, Bitcoin dropped from above $100k to around $70k within 48 hours; recently, due to market optimism, Bitcoin has surpassed $80k, with a total increase of over 13% in the past month—highlighting extreme bullish and bearish disagreements.
Key points: After Waller takes office, the Federal Reserve's liquidity valve will shift from the "cautious easing" of the past three years to a contradictory mode of "rate cuts and liquidity injections, balance sheet reductions." Powell's continued role as a board member raises questions about whether he can counterbalance Waller's policies. Liquidity recovery is the prerequisite for a bull market, but balance sheet reduction is precisely ongoing liquidity withdrawal. Caution is essential when chasing gains at high levels, but as Waller's policy path gradually becomes clearer, phased opportunities will emerge. How much to ease rates and how much to tighten the balance sheet are dynamic factors that will determine the next bull-bear cycle in the crypto space. #Gate广场五月交易分享