Bitcoin and risk assets face months of downside as Fed chair Kevin Warsh starts

Bitcoin is at risk of “a few months” of downside after Kevin Warsh takes over as the next US Federal Reserve chair, according to market commentary cited in the article. Crypto trading account CRYPTOWZRD said BTC often corrects for a few months after a new Fed chair begins, before later trend moves. The piece links this setup to broader risk-asset pressure, arguing that history shows Fed leadership changes tend to weigh on stocks and, by extension, Bitcoin. It also notes the political backdrop: President Donald Trump said he would be disappointed if the Fed does not cut rates at Warsh’s first FOMC meeting in June, while current Chair Jerome Powell delivers his last rate decision on Wednesday. Markets are currently pricing rates to be held, using CME Group’s FedWatch Tool. Still, the article highlights potential counterforces for the crypto market. The Fed has started adding about $200B of US Treasuries back to its balance sheet, a liquidity dynamic that can support markets. It also references strategist commentary calling Warsh’s approach contradictory: Warsh has previously criticized holding rates low after the post-COVID inflation surge and raised questions about the future of balance-sheet expansion in 2026. For traders, the near-term risk is that Bitcoin follows risk assets lower around the Fed transition, but liquidity-related tailwinds could limit the drawdown if rate-cut expectations re-accelerate later.