‘12-Member Rate War’ Erupts Inside Fed as Fears Grow Over Bitcoin’s Fall Below $66,000

▲ Bitcoin (BTC) / AI-generated image

The possibility of a direct clash has emerged between Kevin Warsh, the dovish nominee for the next Chair of the Federal Reserve, and hawkish Fed officials who prioritize inflation control above all else. At the same time, market uncertainty has intensified as Bitcoin (BTC) slipped to the $66,000 level.

According to crypto-focused media outlet BeInCrypto on February 18 (local time), the release of the minutes from the January Federal Open Market Committee (FOMC) meeting revealed a stronger-than-expected hawkish stance among Fed officials. The minutes showed that several members even mentioned the possibility of further rate hikes to achieve the 2% inflation target, signaling the need for additional tightening. This stance directly conflicts with the rate-cut policies expected to be pursued by Warsh when he takes office in June, foreshadowing serious policy discord within the Fed even before the new chair assumes leadership.

Nominated by U.S. President Donald Trump, Warsh has advocated for lower interest rates in alignment with the Trump administration’s economic policies. However, with a majority of the 12 voting members still viewing inflation risks as the top priority, it may be difficult for Warsh to push through a sharp policy pivot toward rate cuts early in his tenure. This policy confrontation has weighed on the crypto market, pushing Bitcoin down from $68,300 to below $66,500.

Adding to the pressure, liquidity returning to Asian markets following the Lunar New Year holiday further amplified Bitcoin’s decline. As Asian traders re-entered the market and trading volumes increased, escalating geopolitical tensions between the United States and Iran heightened risk-off sentiment. With oil prices surging more than 4% and fueling inflation concerns, Bitcoin fell about 1.6% over the past 24 hours, continuing its volatile movement.

Coinbase CEO Brian Armstrong described the recent price decline as “a correction driven by sentiment rather than fundamentals.” Armstrong stated that Coinbase is currently repurchasing its own shares and accumulating additional Bitcoin at lower price levels in an effort to calm market fears. Nevertheless, with the likelihood of a Fed rate cut in March effectively off the table and expectations pushed back beyond June, market tension remains unresolved.

Ultimately, Bitcoin now faces the dual challenges of internal divisions within the Federal Reserve and geopolitical risks. Whether Warsh can persuade a divided committee to support rate cuts will likely be a key determinant of future market direction. With inflation indicators still showing instability, the crypto market is expected to remain highly sensitive to macroeconomic uncertainty until the next Fed chair officially takes office.

Disclaimer: This article is for investment reference only and we are not responsible for any investment losses incurred based on it. The content should be interpreted for informational purposes only.