Just when everyone thought the markets would be drowsy next week due to the Christmas holidays, the real "nuclear bomb" is already counting down to detonation. US Treasury Secretary Bessant confirmed on Tuesday that President Trump is highly likely to announce his nominee for the next Federal Reserve Chairman before Christmas. This is no ordinary personnel change; it's the ultimate signal that will determine the direction of trillions of dollars in global market flows over the next few years. From Tokyo to London, from Wall Street to cryptocurrency exchanges, every trader's screen is locked on Washington—the referee is about to step in, who will be sent off with a red card, and who will gain unlimited firing rights?
A final showdown over control of the "faucet" has begun. Currently, data from market forecasting platform Polymarket points to three very different candidates, each representing a distinct future:
Kevin Hassett, the "Commander-in-Chief of Easing" (leading nominee): As Trump's former chief economic advisor, he is a radical "dove" who has publicly advocated for "interest rate cuts right now." If he takes office, the market will bet on a faster and deeper wave of interest rate cuts, and cheap liquidity may flood into risk assets, igniting a "Trump liquidity bull market."
Kevin Warsh, nicknamed "Pump Raptor," is a veteran hawk who advocates prioritizing the fight against inflation and supports tightening interest rates and reducing the Federal Reserve's balance sheet. More importantly, he publicly supports the development of a central bank digital currency (CBDC) in the United States, which means direct competition and increased regulation from the national level for the decentralized crypto world.
Christopher Waller, the "Stability Technical Officer," is a current Federal Reserve Governor known for his pragmatic and stability-oriented approach, supporting gradual interest rate cuts. He is relatively open to innovations such as stablecoins, believing that proper regulation can enhance the dollar's status. His election signifies policy continuity and predictability.
While global capital markets are anxiously speculating about the Federal Reserve's "artificial water source," a financial "genesis" based on mathematics and code has already quietly begun. The rise of the decentralized dollar (Decentralized USD) is constructing a parallel financial universe independent of any single central bank's decisions. Unlike the uncertainty surrounding the selection of the Federal Reserve Chairman, decentralized stablecoins, represented by USDD, have their stability and liquidity guaranteed by open, transparent, and over-collateralized on-chain reserves.
The recent enactment of the GENIUS Act in the United States, while imposing compliance constraints on stablecoins with requirements for 100% reserves and rigorous audits, has also legally recognized the legitimacy of private sector-issued "on-chain dollars." This means that regardless of whether the next Federal Reserve Chairman is dovish or hawkish, decentralized dollars have become an indispensable component of the dollar's digital hegemony system. It is not merely a transaction tool, but is evolving into an "on-chain operating system" for the dollar, redefining the rules of value clearing and distribution.
Therefore, this "game of power" on Christmas Eve will be a complex triple test for the market:
Short-term sentiment "sniping": History shows that market "expectations" of a new president's policy inclinations often precede actual policy adjustments, triggering sharp fluctuations. If the dovish Hassett is nominated, risk assets may initiate a "Christmas rally" early; conversely, the market may enter risk-averse mode ahead of time. Given the thin liquidity during the Christmas holidays, any news can be amplified, leading to significant price volatility.
The medium-term liquidity "battle": The new chairman's monetary policy stance will directly determine the tightness or looseness of global dollar liquidity. A dovish stance means lower funding costs, potentially prompting institutional funds to accelerate their allocation to crypto assets; a hawkish stance, on the other hand, means a continued high-interest-rate environment, with the opportunity cost of holding crypto assets remaining high. You need to determine whether the future market liquidity will be "increased supply" or "depleted from existing reserves."
A Long-Term Ecosystem Survival Battle: Beyond Interest Rates The new chairman's enforcement of regulatory frameworks such as the GENIUS Act will profoundly impact the crypto industry's environment. Whether the new chairman encourages innovation and provides a conduit for a decentralized dollar, or strengthens regulation and paves the way for an official CBDC, will determine the industry's trajectory over the next four years.
A Trader's Survival Guide: How to Avoid Becoming "Cannon Fodder" in a Changing Market?
Abandon predictions, focus on signals: Don't guess who Trump will choose. The key is whether the market reacts with a "boom" or a "crash" once the nomination is announced. That's the real directional signal.
Respect the "Liquidity Vacuum": Remember the key dates: US stocks will close early this Wednesday (December 24th) at 2:00 AM Beijing time on the 25th, and will be closed all day Thursday. During the holiday period, extremely thin liquidity means that even a small amount of capital can trigger a "flash crash" or a "sudden surge," so be sure to manage your leverage carefully.
Adopting a "dual narrative": While focusing on traditional macroeconomic narratives (interest rates, the US dollar), it is essential to deeply understand the more robust long-term narrative represented by decentralized dollars and stablecoin public chains (such as Plasma and Stable)—an "on-chain dollar clearing network." This may be the ultimate answer to hedging against the uncertainty of sovereign monetary policy.
Ultimately, the change of leadership at the Federal Reserve revealed a harsh reality: within the old financial temple, the value of your assets always depended on the whims of the "shepherd." The real solution may lie in turning our attention to a new world built on code and driven by consensus—a world where the standard answer to value is no longer written in a personnel appointment document. The storm is approaching; will you choose to pray in the old castle, or seek your place on Noah's Ark?