Bitcoin has experienced a notable bounce in recent weeks, as traders react to an unexpected move from BlackRock. The bitcoin price has skyrocketed by 30% after reaching a recent low of $60,000 per bitcoin in February, a movement influenced by a former Federal Reserve chair’s unexpected hyperinflation warning. Traders are now placing their bets on a potential game-changer from Elon Musk, while bitcoin traders and crypto market observers are racing to position themselves ahead of the confirmation hearing for incoming Fed chair Kevin Warsh. This comes on the heels of the U.S. Department of Justice unexpectedly dropping its criminal investigation into outgoing Federal Reserve chair Jerome Powell.
“I have directed my office to close our investigation as the [inspector general’s office] undertakes this inquiry,” Jeanine Pirro, Trump’s appointed U.S. attorney for the District of Columbia, stated in a social media post, paving the way for U.S. president Donald Trump’s nominee Warsh to be confirmed. Earlier this week, Warsh stated that bitcoin and crypto are “already part of the fabric of our financial services industry in the United States,” during a Senate banking committee hearing. Warsh, a former member of the Federal Reserve’s board of governors from 2006 to 2011 during the administrations of Presidents George W. Bush and Barack Obama, and a former banker at Morgan Stanley, has referred to bitcoin as a “important asset that can help inform policymakers” and “the new gold for people under 40.”
As this week’s hearing approaches, Warsh’s financial investments have come to light, showcasing a diverse portfolio of crypto assets, including solana and optimism. Additionally, he holds a stake in the decentralized derivatives trading exchange dYdX, the decentralized exchange protocol Lighter, the venture capital firm Polychain, and the non-fungible token company Dapper Labs. “Kevin Warsh’s appointment would represent a historic shift for the digital asset industry, as he would be the first Federal Reserve chair with a deeply established personal and professional history in the digital asset ecosystem,” Matt Mena stated in emailed comments.
“For the markets, this means a Warsh-led Fed is likely to prioritize proactive rate cuts and a leaner balance sheet, creating a high-liquidity environment that has historically served as a powerful tailwind for both risk assets like bitcoin.” With an official resolution to the conflict in Iran on the horizon, Warsh’s rise could serve as the crucial trigger to propel bitcoin back to $100,000 in the first half of 2026. There are speculations that Warsh’s confirmation might indicate progress for the long-anticipated crypto market structure bill, the Clarity Act, as it heads towards a Senate banking committee mark-up session. “This is how dominos will fall for Clarity Act, [in my honest opinion],” stated Zach Pandl.