Powell is about to step down. Who will be the next "money printer"?

Core Viewpoint

2025-09-29 11:48:30

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From "Estée Lauder's son-in-law" to "Trump's loyalist," how will the potential successor's stance on cryptocurrency affect the market?

Author: Bernard, ChainCatcher

Powell's "Countdown," Trump Prepares in Advance

In May 2026, Federal Reserve Chairman Powell's term will officially end. However, the Trump administration's preparations have already begun—Trump and Treasury Secretary Bessent are attempting to gain substantial control over monetary policy by mastering key voting rights on the Federal Reserve Board (FRB) before the first half of 2026. Currently, Trump's camp has secured three seats by having Stephen Miran replace Adriana Kugler, and board member Lisa Cook is facing pressure to resign due to allegations of mortgage fraud, leaving them just one seat short of controlling the majority of the seven-member board.

From the proposal of the "shadow chairman" concept to the quiet arrangement of board seats, this game surrounding control of the Federal Reserve is reshaping the future landscape of cryptocurrency. According to the two prediction platforms, Polymarket and Kalshi, several candidates who are open to cryptocurrency are competing for this key position, and market expectations for the next Federal Reserve chairman have shown significant divergence: Kevin Hassett, Kevin Warsh, and Christopher Waller have emerged as the top three candidates, with odds significantly ahead; other candidates like Bowman and Bessent have odds of ≤1%. Notably, Musk has also appeared on Polymarket's odds list, currently ranking last.

Three Major Candidates Emerge

On September 5, Trump confirmed in an interview in the Oval Office that Kevin Hassett (Director of the White House National Economic Council), Kevin Warsh (former Federal Reserve governor), and Christopher Waller (current Federal Reserve governor) are his "top three" final candidates to replace Powell.

1. Kevin Hassett: Leading the Prediction Market

In the prediction market, current White House National Economic Council Director Kevin Hassett leads with a 29% probability on Kalshi and 8% on Polymarket. This 63-year-old economist holds a significant position in Trump's camp. He served as the chairman of the Council of Economic Advisers from 2017 to 2019 and was one of the main architects of the Tax Cuts and Jobs Act during Trump's first term, providing economic policy advice to Trump during the 2024 presidential campaign.

Regarding his stance on cryptocurrency, Hassett holds between $1 million and $5 million in Coinbase stock, according to financial disclosure documents submitted in June this year, which he received as compensation for his advisory role at Coinbase. His total assets amount to at least $7.6 million, including speaking fees from institutions like Goldman Sachs and Citigroup.

In terms of monetary policy, Hassett is a typical dove. He has publicly criticized Powell's decision to maintain high interest rates multiple times, arguing that the Federal Reserve should be more aggressive in cutting rates to support economic growth. Trump has praised Hassett several times on CNBC's "Squawk Box" in August, viewing "the Kevins" (Hassett and Warsh) as priority candidates for Federal Reserve chairman.

2. Kevin Warsh: "Estee Lauder's Son-in-Law"

Kevin Warsh ranks second with a 19% probability on Kalshi and 13% on Polymarket, and his background represents a perfect blend of Wall Street and Washington. In 2006, at just 35 years old, Warsh was appointed by then-President George W. Bush as a Federal Reserve governor, becoming the youngest governor in Federal Reserve history. During the 2008 financial crisis, he played a key role as a liaison between the Federal Reserve and Wall Street, coordinating the sale of Bear Stearns to JPMorgan Chase and participating in the decision-making process for Lehman Brothers' collapse.

Warsh's personal background is also noteworthy. His wife, Jane Lauder, is an heiress of the Estée Lauder cosmetics empire, with a net worth exceeding $2 billion. His father-in-law, Ronald Lauder, is not only a longtime friend and former benefactor of Trump but also the person who first proposed the idea of the U.S. purchasing Greenland during Trump's first term, giving Warsh a unique influence in Washington due to his deep political and business connections.

In terms of cryptocurrency, Warsh has shown a pragmatic yet cautious stance. He has invested as an angel investor in the algorithmic stablecoin project Basis and the cryptocurrency index fund management company Bitwise. In a 2021 interview with CNBC, Warsh stated, "In the current environment of significant changes in monetary policy, it makes sense for Bitcoin to be part of a portfolio; it is gaining new life as an alternative currency. If you are under 40, Bitcoin is your new gold." He also mentioned that part of Bitcoin's rise is due to a "bid shift" from gold, pointing out that Bitcoin's price volatility severely undermines its role as a reliable unit of account or effective means of payment. Additionally, in a 2022 op-ed in The Wall Street Journal, Warsh supported the issuance of a central bank digital currency (CBDC) in the U.S. to counter China's digital yuan, a position that drew criticism from the crypto community for potentially threatening decentralization.

3. Christopher Waller: A Strong Advocate for Stablecoins

Current Federal Reserve governor Christopher Waller ranks third with a 17% probability on Kalshi and 14% on Polymarket, and he may be the most positive current Federal Reserve official regarding cryptocurrency. Waller has served as a Federal Reserve governor since 2020 and previously was the research director at the St. Louis Fed, an authority in the field of monetary economics.

Waller's support for stablecoins is particularly noteworthy. In August this year, at a blockchain seminar in Wyoming, he referred to the transformation of payment systems as a "technology-driven revolution" and explicitly stated that "stablecoins have the potential to maintain and expand the international role of the dollar." He believes that stablecoins, with their 24/7 availability, near-instant settlement speed, and unrestricted liquidity, have become particularly useful financial tools, especially in inflationary economies or areas with limited banking services.

Waller argues that stablecoins actually strengthen rather than weaken the global position of the dollar. In a speech at the "A Very Stable Conference" in February this year, he compared stablecoins to "synthetic dollars," complementing Bitcoin's role as "digital gold." He also praised the recently passed GENIUS Act, viewing it as an important milestone in U.S. digital asset regulation that lays the groundwork for the responsible expansion of stablecoins. Waller insists that innovation should primarily come from the private sector and opposes the Federal Reserve issuing a CBDC.

Other Potential Candidates

4. Michelle Bowman: An Internal Reformer Rising

Although she has only a 1% probability in the prediction market, current Federal Reserve Bank Supervision Vice Chair Michelle Bowman should not be overlooked. Nominated directly to the Federal Reserve by Trump in 2018, she was promoted to Vice Chair responsible for bank supervision in May this year, holding key influence in the formulation of stablecoin regulations.

Bowman has shown an open attitude toward cryptocurrency. In August this year, she advocated in a speech that banks should support the wave of digital assets, and the Federal Reserve should provide rules that do not hinder the industry's development. She emphasized that "regulators must recognize the unique characteristics of these new assets and distinguish them from traditional financial instruments or banking products." She even suggested that Federal Reserve employees should be allowed to hold a small amount of crypto assets to "gain an understanding of the underlying functions."

Bowman believes that tokenization can facilitate faster ownership transfers, reduce costs, and mitigate "well-known risks," asserting that stablecoins "will become fixtures in the financial system." She criticized the "overly cautious mindset," advocating for a "pragmatic, transparent, and tailored" regulatory framework. At the FOMC meeting in September 2024, she voted against a significant 50 basis point rate cut, supporting a more moderate 25 basis point cut, a stance that earned her Trump's appreciation.

5. Scott Bessent: The current Treasury Secretary, Bessent clearly stated in a speech in July that "cryptocurrency is not a threat to the dollar; stablecoins can actually strengthen dollar hegemony." Although he explicitly stated that he would not use Treasury funds to purchase Bitcoin, he supports using government-seized crypto assets to establish reserves, currently valued at approximately $15-20 billion.

6. Judy Shelton: An economist, Shelton's views may be the most disruptive. As a staunch advocate for the gold standard, Shelton has long criticized the Federal Reserve's excessive power, even comparing it to the Soviet central planning system, arguing that the Federal Reserve's 2% inflation target is a form of indirect theft of public wealth. Shelton sees the alignment between the gold standard concept and cryptocurrency, having stated, "I like the idea of a gold-backed currency; it could even be realized through cryptocurrency."

7. Roger W. Ferguson Jr.: Former Vice Chairman of the Federal Reserve, representing the voice of the traditional financial establishment. Ferguson led the Federal Reserve's initial response during the 9/11 attacks, ensuring the normal operation of the U.S. financial system. Ferguson has not publicly stated a clear position on cryptocurrency, but he emphasizes the importance of maintaining the Federal Reserve's independence and warns that political interference could undermine the U.S. economic leadership.

8. Arthur Laffer: The father of supply-side economics, the famous creator of the "Laffer Curve" and one of the architects of Reaganomics, Laffer views Bitcoin as "private rules-based money," similar to the gold standard, which can promote global monetary progress and aligns with supply-side principles (reducing government intervention and promoting growth).

9. Larry Kudlow: Former Director of the White House National Economic Council, Kudlow's attitude toward cryptocurrency is relatively cautious but gradually becoming more open. In 2019, he was viewed by the crypto community as "the best argument for why we need Bitcoin" due to his criticism of Bitcoin. However, by 2022, he began warning on Fox Business that "radical progressives will attempt to regulate digital currencies," opposing excessive regulation of cryptocurrencies.

10. Ron Paul: Former Texas Congressman, highly respected in libertarian and Bitcoin communities. Paul has gradually become a staunch supporter of Bitcoin, starting from a critical stance against the Federal Reserve. He claims that the only way to avoid recessions caused by the Federal Reserve is to allow people to use alternative currencies like Bitcoin and exempt cryptocurrencies from capital gains taxes.

11. Chamath Palihapitiya: A billionaire and venture capitalist, one of Silicon Valley's most influential Bitcoin advocates. Palihapitiya once held a significant amount of Bitcoin, and although he later regretted selling Bitcoin worth $3-4 billion, he remains a staunch supporter of cryptocurrency. He proposed that the government could use its Bitcoin holdings to launch a U.S. sovereign wealth fund, raising $50-100 billion through borrowing rather than selling Bitcoin.

12. Howard Lutnick: Current Secretary of Commerce and CEO of Cantor Fitzgerald. Lutnick's company is a major custodian for Tether (USDT), holding tens of billions of U.S. Treasury bonds to support USDT. His son, Brandon Lutnick, has also collaborated with SoftBank, Tether, and Bitfinex this year to establish a $3 billion Bitcoin investment fund.

While these candidates may not have high winning odds in the prediction market, their differing attitudes toward cryptocurrency reflect the diversity of understanding among U.S. policymakers regarding digital assets. From Bessent's vision of a "crypto superpower" to Paul's monetary freedom ideology, from Lutnick's business practices to Laffer's economic theories, each perspective provides unique insights into the potential future direction of the Federal Reserve's cryptocurrency policy. Personnel changes, policy loosening, and softened attitudes indicate that the Federal Reserve, which once made the crypto market "walk on thin ice," is re-engaging in dialogue with the industry.

Market Expectations: Is a Massive Easing Era Approaching?

Mike Novogratz, CEO of Galaxy Digital, pointed out in an interview with Kyle Chasse that "the next Federal Reserve chairman could be the biggest catalyst for a bull market in Bitcoin and the entire cryptocurrency space." Novogratz predicts that if Trump appoints an "extremely dovish" Federal Reserve chairman who significantly cuts rates when it shouldn't, Bitcoin's price could reach $200,000. Meanwhile, BitMEX founder Arthur Hayes, in his latest article "Four, Seven," even provided a "sky-high" prediction that Bitcoin's price will reach $3.4 million—if the Trump administration implements yield curve control (YCC) through control of the Federal Reserve, it could create up to $15.2 trillion in credit. Based on the historical correlation of "for every $1 of credit created, Bitcoin rises by $0.19," Bitcoin could reach $3.4 million.

However, Novogratz also warned that this scenario would be "really bad for America," believing that while such aggressive monetary policy would be beneficial for cryptocurrency, the cost would be the loss of Federal Reserve independence and severe damage to the U.S. economy. Hayes also believes that the Federal Reserve will be forced to purchase long-term government bonds on a large scale to suppress interest rates, allowing regional banks to have more lending space to support small and medium-sized enterprises, with liquidity injections far exceeding those during the 2020 pandemic. This "poor people's quantitative easing 4.0" policy will shift the credit creation power from Wall Street to Main Street's small and medium banks.

Conclusion: Waiting for the Other Shoe to Drop

As Novogratz stated, "the political situation" makes predicting the peak of the Bitcoin cycle unprecedentedly difficult. Changes in Federal Reserve personnel are never just a bureaucratic procedure; they are catalysts for reshaping the entire crypto landscape. From the SEC's softened stance to the FDIC relaxing restrictions, from the approval of Bitcoin ETFs to the advancement of stablecoin legislation, every loosening of the regulatory environment is paving the way for the upcoming monumental shift in monetary policy.

Polymarket data shows a 44% probability that Trump will not announce the next Federal Reserve chairman within the year, meaning the market may have to wait several months to clarify the direction. However, based on the backgrounds of the current popular candidates, regardless of who ultimately takes over, they generally exhibit a more open attitude toward financial innovation. This shift is not coincidental; an irreversible trend has formed: when BlackRock manages the largest Bitcoin ETF, Federal Reserve governors publicly support stablecoins, and the Treasury Secretary states that "cryptocurrency is not a threat to the dollar"—the highest halls of traditional finance have opened their doors to digital assets, and a more crypto-friendly regulatory era may be on the horizon. For the crypto industry, whoever ultimately takes over must be prepared to face the potential arrival of a "massive easing era."
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