May 15—this Friday—the U.S. Senate formally confirmed Kevin Wosch to succeed Jerome Powell as the 17th Chair of the Federal Reserve by a narrow vote of 54 to 45. This is the slimmest approval margin for Fed Chair appointments since 1977. Powell’s 8-year tenure as Chair officially comes to an end, and the Federal Reserve transitions from the “Powell era” to the “Wosch era.”

This transfer of power is not just a change of face. It is very likely a critical turning point for global capital markets in the second half of 2026—including cryptocurrencies—in terms of which direction they ultimately take.

## 1. Why Wosch’s rise is more worth watching than any prior transition
Based on historical data, Fed transitions themselves carry a kind of “curse.” Since 1930, the S&P 500 index has posted average drawdowns of 5%, 12%, and 16% during the 1-month, 3-month, and 6-month periods after a new Fed Chair takes office. But this time, the macro environment Wosch faces is far more complicated than in previous rounds of transitions.

Wosch’s policy framework can be summarized in four keywords: rebuilding inflation indicators, weakening forward guidance, running balance sheet reduction and rate cuts in parallel, and returning to the central bank’s core mandate.

Among these, the most direct impact on the crypto market comes from running balance sheet reduction and rate cuts in parallel. Wosch has long advocated sharply cutting the Fed’s balance sheet by as much as 6.7 trillion U.S. dollars. He argues that the central bank’s large footprint in financial markets undermines its independence, and that monetary policy should be implemented mainly through benchmark interest rates. His signature “QT-for-Cuts” plan calls for simultaneously pushing down interest rates and compressing the balance sheet—an unprecedented policy combination in Fed history.

But there is a major contradiction here: rate cuts release liquidity, while balance sheet reduction withdraws liquidity. If both are pursued at the same time, will liquidity end up loose or tight? The market’s view is already clear: even if rate cuts can provide some offset, the net liquidity withdrawal from balance sheet reduction could still keep the macro backdrop relatively tight for crypto assets.

More importantly, what Wosch takes over is an economy where inflation is again getting out of control. U.S. April CPI rose 3.8% year over year, reaching the highest level in nearly three years. PPI surged 6.0%—far above expectations. As a result, Goldman Sachs pushed its first rate-cut expectation back from September 2026 to December, and delayed the second rate cut to March 2027. Market pricing also shows that the probability of a rate hike at one point rose to roughly 37% before the end of 2026. In other words, after Wosch takes office, he may not only be unable to push for rate cuts, but could also be forced into the awkward situation of raising rates if inflation continues to rise.

## 2. Wosch’s stance toward the crypto market: enemy or friend?
This question is far more complex than it looks at first glance.

Wosch is the first Fed Chair in history to explicitly disclose that he holds crypto assets in his financial disclosures. According to publicly disclosed documents, his and his wife’s combined assets are at least 192 million U.S. dollars, covering more than 20 blockchain and digital-asset entities, including Solana, dYdX, Optimism, and Polychain Capital. In a hearing, he explicitly refused to issue a digital U.S. dollar, stating that the central bank has no authority to issue digital currency and that this is a “bad policy choice.” He also described Bitcoin as “an important asset that can help policymakers,” and personally holds more than 100 million U.S. dollars in crypto-related investments.

Based on these statements, Wosch appears to be extremely “friendly” toward the crypto industry. He is even seen as a milestone toward cryptocurrencies receiving formal “legitimate macro asset” status, which could attract more traditional retirement funds and insurance capital into the space.

But we also must see the other side of the coin.

Wosch has clearly said he prefers to use interest-rate tools—not balance-sheet adjustments—to carry out monetary policy. He has criticized the Fed for years injecting trillions of dollars of liquidity into the financial system through large-scale asset purchases (i.e., quantitative easing), and argues that this liquidity has been a key driver behind the sharp rise in risk assets such as Bitcoin over the past few years. Reducing the Fed’s balance sheet means directly withdrawing dollars from the financial system. According to historical data, after the Fed began its balance sheet reduction cycle in 2022, the total market value of the crypto market at one point fell below the 1 trillion U.S. dollar mark.

The deeper issue is that Wosch has long lacked sufficient influence within the Federal Reserve. Unlike previous Chairs, he did not come up through promotions within the Fed’s internal system. He also lacks professional authority and a network of connections in both the Board and the regional Fed banks. In the context of the FOMC already experiencing the most serious disagreements since 1992, any policy proposals he advances would be difficult to quickly consolidate into consensus. This means that market uncertainty about Wosch’s “rate cuts + balance sheet reduction” combination could hit the crypto market harder than the actual policy rollout itself.

## 3. The crypto market has already provided direct feedback
The news never lies. After the announcement that Wosch had been approved to serve as Fed Chair, Bitcoin promptly fell below the 80,000 U.S. dollar level for the first time since earlier this year. Then, combined with a macro resonance in which U.S. Treasury yields surged and U.S. stocks and global stock markets broadly declined, Bitcoin slid from its prior highs, testing the 78,600–78,700 U.S. dollar region at the low point. Ethereum also simultaneously lost the 2,250 U.S. dollar support level, dropping to around 2,204 U.S. dollars at its lowest. Consecutive upside surprises in April CPI and PPI, together with the pricing of a hawkish “leadership change,” are systematically suppressing crypto valuations.

## 4. Weekend and next-week trading recommendations
With the weekend approaching, liquidity is shrinking, and after a sharp selloff the market will most likely enter a range-bound consolidation at lower levels. Bitcoin’s trading range is 78,500–79,800 U.S. dollars, while Ethereum is between 2,200 and 2,270 U.S. dollars. Aggressive traders may consider selling near the upper end and buying near the lower end within the range, while conservative traders should stay on the sidelines.

But I must remind everyone: the market’s true pricing of Wosch’s appointment is far from complete. The June FOMC meeting will be his first appearance, and how he balances “political pressure to cut rates” with “inflation realities” will be the key factor determining the longer-term direction of the crypto market. Before then, strictly control your positions, keep any single trade loss to no more than 2% of total capital, keep total exposure below 50%, and strictly follow stop-loss rules.