Next 'U.S. economic president' narrowed to three... Who is the pro-crypto candidate?

Trump signals "a strong proponent of steep rate cuts"

Three candidates shortlisted… monetary easing is common

Hassett and Waller are pro-crypto, Warsh is a 'question mark'

As discussions over the next chair of the U.S. Federal Reserve (Fed) intensify, the cryptocurrency market's attention is turning to Washington. The Fed chair's stance could affect not only the policy rate path and market direction but also the pace at which crypto industry elements like stablecoins and decentralized finance (DeFi) are integrated into the regulatory framework.

President Donald Trump said in a national address on the 17th (local time) that the next Fed chair would be "a person who believes in large rate cuts" and added he would "announce soon."

The leading candidates currently being discussed are Kevin Hassett, chair of the White House National Economic Council (NEC); former Fed governor Kevin Warsh; and current Fed governor Christopher Waller. According to prediction market platform Kalshi, as of the 18th Hassett's chance of winning was highest at 51%, followed by former governor Warsh (28%) and Governor Waller (16%).

Kevin Hassett, NEC chair…"the person the crypto market most wants"

Kevin Hassett, NEC chair, is currently viewed as the most likely candidate for the next Fed chair. He is seen as having close policy ties with President Trump and has the advantage of having directly overseen crypto policy within the White House.

Hassett led the White House-led Digital Asset Working Group earlier this year and released a report with recommendations on crypto regulation. He also has personal ties to crypto: he has disclosed holding about $1 million worth of Coinbase shares and serving on Coinbase's academic and regulatory advisory board, receiving at least $50,000 in compensation.

On interest rate policy, he is also a profile favored by the crypto market. He has publicly argued that "current rates are excessively high" and that faster and deeper rate cuts are needed. Juan Leon, Bitwise's chief investment strategist, said, "Rate cuts are very bullish for the crypto market," and assessed, "Hassett is the clearest dovish candidate." Jack Paendeul, head of Grayscale Research, also analyzed him as "a figure with both crypto policy experience and a rate-cutting stance."

However, there are some market concerns about Hassett's frontrunner position. If Hassett is perceived as too closely aligned with President Trump, some in the bond market worry the Fed's policy independence could be undermined. In that case, while expectations for easier policy may rise in the short term, concerns that the Fed might not respond adequately if inflation resurges could emerge, potentially pushing long-term Treasury yields higher.

Former Fed governor Kevin Warsh — crypto stance is a 'question mark'

Kevin Warsh has recently emerged as a dark horse after President Trump personally mentioned him as a candidate in an interview with the Wall Street Journal (WSJ). Following that, Kalshi's odds for Warsh rose rapidly from 15% to 40% in a short period.

Like Hassett, Warsh supports easier monetary policy. He has been a strong critic of past Fed policy decisions. In July he publicly said, "A delay in Fed rate cuts will go down as a historic blemish," and stated, "a change in monetary policy leadership is imminent."

In a recent WSJ opinion piece he directly criticized, "Inflation is a matter of choice, and the Powell-era Fed has repeatedly made the wrong choice." He argued that artificial intelligence (AI) will be a powerful disinflationary force and claimed, "If the Fed undertakes fundamental reforms in regulation and monetary policy, a new golden age could begin."

He is differentiated from other candidates by the perception that he is not overly close to the White House. However, he has not directly expressed views on crypto and related industries. As a result, the industry evaluates him as "friendly on monetary policy but less crypto-friendly than Hassett or Waller."

Fed governor Christopher Waller — most proactive on crypto

Christopher Waller is regarded as the candidate most directly connected to the crypto industry among the pool. News that President Trump would interview Waller as a candidate has also boosted his prospects.

Waller was appointed to the Fed by President Trump and confirmed by the Senate at the end of his 2020 term. Within the Fed this year he has been one of the most vocal proponents of cutting the policy rate. Waller pushed for rate cuts even at the rate-hold meeting in July. At the Yale CEO Summit held in New York on the 17th, he said, "I see no evidence that inflation expectations are surging," suggesting there is room to cut rates by up to 1% point.

He has shown the most proactive stance on crypto. At the Fed's payment innovation conference last October, Waller said, "Decentralized finance is no longer an object of suspicion or scorn," and described stablecoins as "a new form of private money that can coexist with existing payment methods." He is the candidate who has most positively evaluated the crypto industry.

Political variables, however, are a burden. Some of Trump's close aides are reportedly unhappy that Waller supported a 0.5% point rate cut in September 2024 before Trump's administration, viewing it as a political betrayal for delivering a 'big cut' that could favor the Democrats just before the election. This has led to assessments that Waller is disadvantaged in terms of political credibility.

Duhyun Hwang, BloomingBit reporter cow5361@bloomingbit.io