Warsh's debut puts the crypto market to the test

Bitcoin and XRP are holding their breath ahead of Federal Reserve Chair Kevin Warsh's first Federal Open Market Committee (FOMC) meeting. According to Yahoo Finance, market sentiment is clearly defensive, reflected in the crypto Fear & Greed Index sitting at 22 out of 100 — well within "extreme fear" territory.

Warsh was appointed Fed Chair in May 2026 and takes the helm during a period marked by persistent inflation debate and geopolitical turmoil. His monetary policy profile is two-sided, and it is precisely this combination that makes Friday's meeting particularly difficult for the crypto market to price in.

A Fear & Greed Index of 22 signals that the crypto market has already priced in considerable uncertainty.
Crypto braces for Warsh's first FOMC meeting - Bilde 1

Hawkish on inflation — but open to crypto

Warsh is traditionally regarded as a monetary policy hawk, with a strong emphasis on low inflation and tight balance sheet management. Such a profile would normally put pressure on risk assets like cryptocurrencies, according to the background analysis from the research material used in this article.

But the picture is more nuanced than that. Warsh is known for preferring the so-called "trimmed mean PCE" as his inflation measure — a gauge that currently sits closer to 2.3 percent, compared to core inflation of around 3.3 percent. If he makes this the Fed's primary indicator, it opens the door to greater monetary policy flexibility and potentially faster rate cuts than the market expects.

Bitcoin is a very good policeman for monetary policy — Kevin Warsh, as quoted in the research material

Warsh views Bitcoin as a "legitimate technological advancement in finance" and describes it as a store of value on par with digital gold. He also holds personal investments in a number of crypto-related projects, including Solana, dYdX, Compound, and Polychain Capital, as well as a stake in Bitwise Asset Management, which manages a spot Bitcoin ETF. These disclosures are based on submitted conflict-of-interest declarations and have not been independently verified by 24markets.

Crypto braces for Warsh's first FOMC meeting - Bilde 2

XRP could fall harder than Bitcoin

Historical data shows that XRP and Bitcoin move in close lockstep, with a correlation of around 0.86 over the past year. But there is an important asymmetry: XRP reacts more sharply to negative market signals.

According to the research material, historical patterns suggest that if Bitcoin falls 10 percent as a result of hawkish FOMC signals, XRP could fall around 15–16 percent. This "high-beta" dynamic makes XRP particularly vulnerable if Warsh sends clear contractionary signals on the rate path.

0.86
BTC/XRP correlation over the past year
50–100%
Increased daily volatility on FOMC days

Fed meetings are generally known to trigger volatility spikes in the crypto market. Bitcoin's average daily volatility on FOMC decision days can historically be 50 to 100 percent higher than on ordinary trading days, according to the research material.

The market is looking for more than just the rate decision

Experts point out that it is not necessarily the rate decision itself, but rather the rate path ("dot plot") and Warsh's press conference, that will give the market its strongest directional cue. Warsh has signaled that he intends to offer fewer explicit forward guidance signals than previous Fed leadership — something that could in itself increase volatility over time.

The combined strategy he has outlined — simultaneous rate cuts and a reduction of the Fed's balance sheet — is unorthodox and will likely spark debate within FOMC circles. Short-term easing could lift risk appetite and crypto prices, while long-term balance sheet reduction works in the opposite direction on market liquidity.

As of June 17, 2026, Bitcoin is trading at $65,821. The market is waiting.