Recently, the market has been focused on one thing: Powell will step down as Chairman of the Federal Reserve in May next year, and Trump's insider—Kevin Hassett—has almost become the designated successor. Why is this important? Because Hassett is not an ordinary official; his stance directly affects the pace of monetary easing and capital flows in the coming years. Today, let's clarify: why him? How will the market change after he takes office? Especially, how should the cryptocurrency sector position itself?
1. Why can Hassett 'win by lying down'? Three strong reasons
Cryptocurrency 'insiders'
Hassett is a public supporter of cryptocurrency, holding over $1 million worth of Coinbase stock, and has previously served on Coinbase's advisory board. Having someone like him in charge of the Federal Reserve is akin to putting someone 'knowledgeable' in charge of the money bag, significantly reducing the likelihood of a one-size-fits-all policy. Why is the market excited? Because institutions have long awaited regulatory clarity, and Hassett's ascension may promote the expansion of Bitcoin ETFs and even integrate cryptocurrency into a more mainstream asset allocation framework.
The attitude towards interest rate cuts is more 'aggressive' than Powell's.
This guy recently made it clear: 'If I were chairman, I would immediately cut rates by 50 basis points!' Compared to Powell's current hesitance with 'preventive rate cuts', Hassett's stance is practically aligned with Trump—it's all about using low-cost funds to stimulate the economy. Wall Street has already acted in advance, with short-term interest rate futures pricing in rate cuts soaring from 30% to nearly 90%. However, bond market moguls are panicking, fearing he might create out-of-control inflation to please the White House.
Trump's 'political insurance'.
Hassett has served as Trump's campaign advisor, chairman of the White House Council of Economic Advisers, and even helped Trump with the controversial 'death zero prediction model' during the pandemic. This loyalty gives Trump the confidence to hand the Federal Reserve over to him—after all, before the 2026 election, monetary policy must align with economic data. In other words, after Hassett takes office, the independence of the Federal Reserve may yield to political demands, and the period of easing may last longer than expected.
Second, how will the market move? Remember two phases.
Phase 1: the expectation hype period (now → May 2026).
Key signal: After Trump formally nominates Hassett in January next year, the market will enter a 'shadow Federal Reserve' mode. Even if Powell has not yet resigned, any dovish remarks from Hassett could trigger expectations of interest rate cuts.
Asset impact:
US stocks and crypto lead: interest rate-sensitive assets (technology stocks, real estate) and the crypto market will likely jump ahead. Historical data shows that during interest rate cut cycles, the correlation between the Nasdaq and Bitcoin strengthens.
The dollar is under pressure: expectations of easing are weighing on the dollar, capital is flowing back to emerging markets, benefiting the Asia-Pacific stock market and cryptocurrencies.
Phase 2: the policy implementation period (after May 2026).
Don't expect unlimited liquidity: even if Hassett is dovish, he still has to face the inflation data. The current core PCE is still around 3%; if he forcefully cuts rates significantly, it could trigger a bond market sell-off (similar to the UK's 'Truss moment'), which would instead push long-term rates higher.
Crypto market logic shift:
In the first half of the year, focus on 'liquidity expectations', and in the second half, watch for 'policy execution power'. If interest rate cuts are implemented but the economy shows no improvement, the market will question the effectiveness of the Federal Reserve's tools, increasing volatility.
Institutional funds will be more cautious: major institutions like Vanguard have allowed allocations to crypto assets, but they prefer mainstream coins like Bitcoin and Ethereum; altcoins need to be supported by actual ecosystems.
Third, insights for the crypto market: beware of the backlash from 'expectation fulfillment'.
Short-term optimism, but don't go crazy.
Hassett's ascension to power almost certainly means the opening of the interest rate cut floodgates, and the crypto market is likely to enjoy liquidity-driven growth in the first half of next year. But don't forget this guy's dark history—he once predicted the Dow would 'soar to 36,000' (it ended up taking 22 years). The market tends to over-interpret his remarks, and if reality falls short of expectations, the correction could be more severe.
Layout should focus on the main line.
Bitcoin and Ethereum: institutional allocation demand + benefits from interest rate cuts, remain the ballast.
Compliance track: if Hassett promotes policy easing, crypto banks and custodial service providers (like Coinbase) will benefit directly.
Beware of political risks: if Hassett pressures data independence to please the White House, it could raise market concerns about the dollar's credibility, strengthening the safe-haven attributes of gold and Bitcoin.
Summary: Hassett is the key, but the lock is the economic data.
A change in the Fed's leadership is not a cure-all; Hassett's dovish stance will still depend on inflation and employment. But one thing is certain: in the next six months, a decrease in policy uncertainty will drive a rebound in risk assets. Whether the crypto market can seize this window depends on whether projects can demonstrate their real value before liquidity pulls back.
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