The Fed is about to welcome a change in leadership, which could become the biggest source of uncertainty for the crypto market going forward.

The current U.S. economy is in a delicate balance—although inflation has eased, it remains high, employment data is beginning to soften, and growth momentum is clearly slowing. The policy direction of the next Fed chair will directly determine the trajectory of global liquidity over the next three years: whether to maintain a tightening stance or shift towards a more accommodative policy environment.

**Three divergent paths, the market has shown signs**

The first possibility is that a hawkish candidate takes over. If the new chairman continues or even strengthens the tightening stance, the interest rate hike cycle may restart, and dollar liquidity will face further contraction. This would directly suppress risk assets that rely on liquidity-driven growth, including the crypto market.

The second possibility is to move to another extreme. If dovish policymakers come to power, expectations for interest rate cuts could be realized earlier, and loose liquidity would flood into the market, leading to a rebound in risk assets. High-risk assets like Bitcoin and Ethereum are most likely to attract funding in such an environment.

The third scenario is to continue with the existing policy framework. However, even so, the uncertainty in the market itself can trigger a period of volatility—investors' confusion about the direction of policy often triggers extreme market conditions more easily than changes in the policy itself.

**Why is this time point particularly dangerous**

Historical data shows that periods of leadership transition at the Fed are often the most vulnerable phases for the market. The combination of chaotic policy expectations and unclear liquidity directions can push market volatility to extremes. The crypto market, due to its high leverage and participants' strong sensitivity to macro factors, tends to amplify this volatility.

In the short term, focusing on market volatility indicators and dollar liquidity indicators can help capture the rhythm. But don't be scared away by short-term fluctuations; inflation data and employment reports are the real indicators that determine the long-term direction.

**View this round of changes with clarity**

No matter who takes this position, the fundamental logic will not change: the trend of inflation and the state of the job market are the ultimate determinants of monetary policy. The long-term allocation value of Bitcoin and Ethereum also depends on these two core variables.

In times of drastic changes in the macro environment, it is often those participants who understand the policy logic in advance that gain a first-mover advantage. What do you think about the policy tendencies of the next chairman?