The 'succession drama' of the Federal Reserve chairman has just released new news, yet it has sent a wave of 'reassurance' to the crypto market—11 candidates have emerged, and the frontrunner Waller is seen as a 'crypto-friendly' contender. Coupled with Powell's hint that a rate cut is coming in September, the dual expectation of loosening is stacking up. The liquidity in the crypto market may soon be 'sufficient,' so don't miss this opportunity!
First, let's highlight: among the 11 candidates, there are 'potential allies' for the crypto market.
U.S. Treasury Secretary Basant recently revealed that there are 11 'strong' candidates to succeed Powell, with interviews starting after Labor Day on September 1, and a final list of 3-4 candidates will be given to Trump. Among these 11, the most noteworthy for the crypto community is the current leading Federal Reserve Governor Chris Waller—according to Polymarket data, his probability of being appointed by Trump is as high as 27%, far exceeding other candidates (the second place, Hassett, is only 11.2%).
Why is Waller seen as a 'crypto ally'? The key lies in his monetary policy thinking: not focusing on lagging current data but acting in advance based on forecasts. This is completely different from Powell's style of 'waiting for clear data before taking action'—for instance, if there are signs of economic cooling now, Waller might call for a rate cut and increased liquidity earlier, rather than waiting for worsening unemployment data. For the crypto market, 'earlier easing' means 'earlier access to fresh funds,' as crypto, being a risk asset, is most in need of liquidity.
And it's not just Waller; the larger context of these 11 candidates also hides signals: Trump has consistently criticized Powell for 'not cutting rates and killing businesses,' so this time in selecting a successor, he will definitely prioritize those 'willing to loosen monetary policy'—no matter who ultimately gets elected, it’s highly likely they will be more inclined towards loosening than Powell, especially since next year is an election year and Trump needs low interest rates to support the economy, which represents a long-term 'policy dividend' for the crypto market.
More critically: the expectation of a rate cut is already 'solidified,' and the leadership change is just 'adding a buff.'
Don't wait for the leadership change! Powell already 'spoke out' at the Jackson Hole meeting last week: acknowledging that the risks to the labor market are increasing and implying that a rate cut is coming in September. This means that regardless of who takes over Powell's role, short-term liquidity easing has become a certainty—September is almost universally expected to see a rate cut of 25 basis points, with some institutions even predicting a possible 50 basis points cut.
Looking back at history, one can see how important Federal Reserve rate cuts are to the crypto market: after the rate cut in March 2020, Bitcoin rose from $3000 to $60,000, a 20-fold increase; during the 2019 rate cut cycle, ETH rose from $180 to $800, more than a 3-fold increase. Essentially, after 'liquidity release,' idle money in the market has nowhere to go and will flow into high-yield risk assets like crypto.
What's even better now is the dual expectation of 'rate cuts + leadership change': on one hand, the September rate cut is imminent, and funds will rush in to grab positions; on the other hand, the market knows that the next Federal Reserve chairman may be more accommodative and will be willing to hold positions longer—like institutions currently wildly buying ETH ETFs (with a cumulative inflow of $13.3 billion), betting on 'long-term easing + crypto bull market.' This trend won't be interrupted by the leadership change but may accelerate due to a more aggressive new chairman.
For crypto players, how should they seize this wave of good news? Remember two core logics.
Mainstream coins are the 'safe bet', don't chase small altcoins randomly.
Under the expectation of loosening, funds will first boost mainstream coins like BTC, ETH, and SOL, which have institutional holdings and solid ecosystems—ETH has already reclaimed $4600, and Tom Lee predicts it could reach $5500. SOL has risen 8.7% to stabilize at $210, all signals that funds are positioning early. If you hold these coins, don't exit easily; if you haven't entered yet, wait for a pullback to key support levels (ETH $4500, SOL $200) to enter gradually, which is much steadier than chasing high-flying small altcoins.Keep an eye on 'policy nodes', don't miss the liquidity window.
The next two key points to focus on: the candidate interview progress around September 1 (if Waller's support increases, it will further strengthen loosening expectations), and the Federal Reserve's interest rate meeting in September (to determine the rate cut magnitude). Before these two nodes, market sentiment will continue to be driven by favorable news; as long as no black swan events occur, the rebound trend in the crypto market will not break.
To be honest, this wave is not a 'small rebound,' but a 'big opportunity driven by liquidity.'
Many people are concerned that 'the change of leadership will cause policy turbulence,' but think of it the other way: Trump wants the election, the new chairman needs to support the economy, and loosening is the only big direction; Powell has already paved the way for a rate cut in September, and the new chairman will only 'ramp up' and not 'hit the brakes.' For the crypto market, this is like 'first getting some seed funding, and there will be more later'—as long as liquidity continues to flow, BTC hitting $120,000, ETH reaching $5500, and even an all-out explosion of altcoins are not impossible.
What you need to do now is not to be disturbed by the noise of 'leadership change,' but to grasp the core logic of 'looseness + rate cuts,' hold onto mainstream coins, and wait for funds to gradually push prices up. After all, in the crypto market, 'following the liquidity of the Federal Reserve' is always one of the most reliable strategies.
