Michael Saylor Friday claimed Kevin Warsh "will be the first pro-Bitcoin Chairman of the Federal Reserve" following Trump's nomination announcement, according to Bitcoin Magazine.
However, Bitcoin's immediate reaction tells a different story, with the asset dropping to $82,000 and triggering $1.68 billion in liquidations.
Independent verification of Saylor's exact statement could not be found across major news sources or Saylor's social media accounts. The characterization contradicts both Warsh's documented positions and market behavior following the nomination.
Warsh dismissed private cryptocurrencies as "software that pretends to be money" in a 2022 Wall Street Journal op-ed. He advocated for a U.S. central bank digital currency to counter China's digital yuan, a stance Bitcoin proponents widely criticized as antithetical to decentralization principles.
What Happened
Market analysts view Warsh's potential influence as bearish for Bitcoin. Markus Thielen of 10x Research told CoinDesk that Warsh's "emphasis on monetary discipline, higher real rates, and reduced liquidity frames crypto not as a hedge against debasement but as a speculative excess."
Bitcoin fell from the high $80,000s to $82,601 Friday morning. Long positions accounted for $1.56 billion of total liquidations, representing 93% of forced exits according to CoinGlass data. Roughly 267,370 traders were pushed out of positions.
Warsh did invest in algorithmic stablecoin project Basis in 2018 and serves as an advisor to crypto asset manager Bitwise. He stated in past comments that Bitcoin could "serve as a sustainable store of value, similar to gold" under certain conditions.
However, his 2022 op-ed directly contradicted this nuanced position. Warsh wrote that "cryptocurrency is a misnomer - it isn't money, it is software" when arguing for federal CBDC development.
Read also: Trump Nominates Monetary Hawk Warsh As Fed Chair While Bitcoin Slides to $82,000
Why It Matters
The disconnect between characterizing Warsh as "pro-Bitcoin" and market reality creates confusion about his likely policy approach. His hawkish track record during the 2008 financial crisis prioritized inflation concerns over growth, even as the economy faced deflation risks.
In September 2008, as Lehman Brothers collapsed, Warsh stated he remained unwilling to "relinquish my concerns on the inflation front." Seven months later, with inflation at 0.8% and unemployment at 9%, he maintained he was "more worried about upside risks to inflation than downside risks."
Renaissance Macro Research stated on X that "Kevin Warsh has been a monetary policy hawk his entire career" and that "his dovishness today stems from convenience." Bloomberg Chief U.S. Economist Ana Wong said Warsh's FOMC transcripts from the crisis era "scared me."
Higher real interest rates reduce appeal of non-yielding assets like Bitcoin. When real rates rise, investors typically scale back exposure to risk assets in favor of yield-bearing instruments. Warsh's historical advocacy for tighter monetary conditions directly conflicts with the liquidity environment that supported Bitcoin's growth.
Saylor's Strategy holds 712,647 Bitcoin worth approximately $62.5 billion at current prices, representing about 3.4% of Bitcoin's fixed 21 million supply. The company purchased 2,932 additional Bitcoin between January 20-25 for $264.1 million.
Strategy's stock has declined approximately 64% since July to around $160, closely tracking Bitcoin's 31% drop from October's all-time high near $126,000. The company faces ongoing questions about its ability to maintain aggressive Bitcoin accumulation during extended price declines.
Warsh's limited crypto investments and occasional positive comments about Bitcoin as a store of value do not constitute a comprehensive pro-crypto policy framework. His documented positions on monetary policy, balance sheet reduction, and support for government-issued digital currencies suggest a more complex relationship with decentralized cryptocurrencies.
The Federal Reserve chair influences but does not unilaterally control monetary policy. The 12-member FOMC votes collectively on rate decisions, diluting any single member's influence regardless of their personal views on Bitcoin.
Read also: Binance Converts $1 Billion Emergency Fund To Bitcoin Following October Crash Criticism