TrumpRegulation
|5 min ReadNew Fed Chair Could Ignite A Powerful Bull Market
Carter Hayes
Senior Analyst
Published
Jan 16, 2026
Alpha Briefing: Markets are already trading Kevin Hassett as the next Fed chair, with prediction odds near ninety percent and a clear tilt toward faster cuts and looser balance sheet policy. For Bitcoin and high-beta crypto, that setup points to lower real yields, friendlier regulation, and a potential blow-off leg into 2026 if the nomination is confirmed.
On Polymarket, traders now assign roughly an eighty six percent chance that Kevin Hassett becomes the next Federal Reserve chair, far ahead of any rival candidate. For crypto markets, that probability is high enough to treat a Hassett Fed not as a tail risk but as a base case: a central bank less obsessed with squeezing out every trace of inflation and more willing to cut rates aggressively when growth wobbles.
The message in Hassett’s recent comments is consistent. He warned in late November that delaying rate cuts in the middle of a government shutdown would be “very bad timing,” arguing that the fiscal standoff could knock around one and a half percentage points off fourth quarter GDP. Earlier in the month he repeated that estimate and said he saw few reasons not to ease. In plain language, he sees growth risk as the main problem, not runaway inflation.
For Bitcoin, the details of Fed procedure are less important than the direction of travel. A chair who openly worries that current rates are choking off jobs and investment is much more likely to drive policy back below three percent and, in a stress scenario, toward the one percent area. That is exactly the environment in which hard assets, long duration tech and crypto have historically outperformed.
Faster Cuts And A Softer Stance On Inflation
Hassett has signaled that he treats the two percent inflation goal as a flexible ceiling rather than a sacred anchor. His focus is on preserving a “supply side boom,” with real activity and employment at the center of the mandate. That means less worship of each monthly CPI print and more willingness to act preemptively when growth data turns down.
If he takes the chair and follows through, the Fed’s reaction function shifts. Markets would expect earlier and deeper cuts, a steeper drop in short term yields, and a softer dollar over time. That is a direct tailwind for Bitcoin. Lower real yields reduce the opportunity cost of holding non yielding assets, and a slightly weaker dollar tends to push investors toward alternative stores of value and higher risk trades.
This is also the regime in which carry trades and leverage grow. Cheaper funding makes it easier to run basis trades, to borrow against spot Bitcoin, and to push more capital into perpetual futures. Volatility may remain high, but the drift in such a cycle usually tilts upward for risk assets.
QT Ends, QE Narratives Return
The calendar adds fuel. On December 1, the Fed formally ended its quantitative tightening program, closing the book on the balance sheet shrinkage launched in 2022. The immediate liquidity impact is modest, yet the signal is loud. The forced drain is over. The next large balance sheet move is more likely expansion than further contraction.
Overlay a Hassett chair on that backdrop and the probability of some form of QE in the next downturn rises. He has already argued that in an economy “without real inflation,” current rates block growth and job creation. If growth disappoints or financial conditions tighten sharply, a Fed that is comfortable tolerating slightly higher inflation has fewer reasons to resist asset purchases.
Crypto has lived through this movie. Each previous phase of balance sheet expansion compressed term premia, flattened safe yields, and pushed capital into the edges of the risk spectrum. If traders start to believe that a Hassett Fed will eventually restart buying, even in a lighter or more targeted format, the forward liquidity story for Bitcoin improves again.
A Fed Chair With Crypto Ties And A 2026 Window
What makes this nomination especially relevant for digital assets is Hassett’s direct exposure to the sector. He has reportedly held seven figure Coinbase equity and served on the exchange’s advisory council. Inside the White House, he sat on digital asset policy groups that tried to keep room for innovation inside the regulatory framework, and he has described Bitcoin as capable of “rewriting financial rules.”
That background does not mean the Fed will suddenly manage spot ETFs or sponsor token launches. It does mean the chair is less likely to treat crypto as a systemic villain and more likely to engage seriously with questions like stablecoin plumbing, tokenized treasuries and the link between banks and on chain rails. A less hostile tone at the top can reduce perceived legal risk for institutions in Brazil, the Gulf and elsewhere that already rely on dollar stablecoins and are exploring on chain infrastructure.
Traders are mapping this into a rough timeline. If Hassett is nominated and confirmed, the key window runs from mid 2025 into 2026. By then, rate cuts could be well underway, QT long finished, and QE talk back in the air. In that environment, Bitcoin tends to act as high beta macro collateral. If liquidity is plentiful and regulation stabilizes, the next leg could be sharp, with latecomers once again chasing price into thin order books.
The flip side is simple. If the nomination fails or the Fed proves less dovish than markets now expect, this entire “Hassett trade” has to be repriced. Yields would reset higher, the dollar would strengthen, and leverage across crypto would need to adjust fast. For now, though, prediction markets, Fed signaling and Hassett’s own record point in the same direction: toward a friendlier, easier regime that could turn 2026 into a critical test of how far a liquidity driven crypto cycle can run.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.