Bitcoin fell to a two-month low late Thursday as speculation grew that Kevin Warsh could be President Donald Trump’s pick to replace Federal Reserve Chair Jerome Powell when Powell’s term ends in May.

Warsh seen as leading contender

Trump said Thursday he will announce his Fed chair selection soon.

Reports said the administration is preparing to nominate Warsh, a former Fed governor who served from 2006 to 2011.

Bitcoin dropped to nearly $81,000 as Warsh’s odds surged in betting markets.

The move extended a broader pullback that has left bitcoin down about a third from its October record highs.

Why the market read-through matters for bitcoin

Analysts pointed to Warsh’s reputation for monetary discipline, including a preference for higher real interest rates and a smaller Fed balance sheet.

Those expectations can pressure risk assets that have historically benefited from abundant liquidity.

Markus Thielen, founder of 10x Research, told CoinDesk:

“Markets generally view a resurgence of Warsh’s influence as bearish for Bitcoin, as his emphasis on monetary discipline, higher real rates, and reduced liquidity frames crypto not as a hedge against debasement but as a speculative excess that fades when easy money is withdrawn.”

GFC-era hawkishness back in focus

Warsh repeatedly cited inflation risks during the 2007–2009 global financial crisis, including in September 2008 after Lehman Brothers collapsed.

He later said he was more worried about upside inflation risks even as inflation readings and labor markets weakened.

Limits on a chair’s power

Even if nominated and confirmed, a Fed chair does not set rates alone.

Policy decisions are made by committee votes, which can dilute any single official’s influence.