This week, in Eastern Standard Time, President Trump of the United States suddenly accelerated the nomination process for the new Federal Reserve Chair, disrupting the originally expected gradual management of expectations. On one hand, he announced the imminent announcement of the nominee, while on the other hand, he unexpectedly moved the timeline forward, creating a new uncertainty gap between traditional macro and crypto markets. Against this backdrop, Bitcoin briefly fell to its lowest point since last November, and Ethereum-related funds also experienced significant reallocation and risk contraction. The real question surrounding this personnel change is: from the nomination game in Washington to the migration of funds on-chain, how does the uncertainty of policy personnel layer upon layer transmit and amplify, ultimately impacting the entire pricing chain of crypto assets?
The Nomination Timeline is Rewritten: The Market is Caught Off Guard
● Timeline Reversal: According to the briefing, the initial signal released by Trump was to announce the new Federal Reserve Chair "next week," leaving the market with a relatively predictable window for the game. However, he then suddenly moved the timeline to "the next morning," completing a switch from "comfortable expectations" to "urgent countdown" in a very short period. This disruption in the nomination rhythm is not based on publicly transparent information, but rather resembles a form of rhythm control, forcing traders to hastily reprice under conditions of information asymmetry.
● Hedging the Unknown with Price: In the absence of credible data regarding the candidate list and nomination probabilities, both traditional financial markets and crypto markets lacked sufficient information to build a logical chain of "who takes office—how policies change—how assets are priced." Therefore, the market could only resort to hedging uncertainty with price itself: selling high-volatility assets, reducing leverage, and increasing the proportion of cash and highly liquid assets, preemptively buying insurance for the "worst-case scenario" at the trading level. In the absence of directional guidance, volatility itself became the only tradable asset.
● Personnel as Pathway: For macro traders, the choice of the Federal Reserve Chair is often directly equated with the "abbreviation" of the interest rate path and the pace of balance sheet contraction for the coming years, serving as a core variable for betting on yield curve shapes and risk premiums. This pricing logic has been quickly "inherited" by crypto traders: who sits in the chair is interpreted as a long-term signal leaning more hawkish or dovish, which in turn projects onto dollar liquidity, financing costs, and even the overall valuation system of risk assets. Personnel matters are not isolated events but rather the starting point of a new liquidity narrative.
Bitcoin Hits New Lows: Risk Aversion Spreads from Off-Chain to On-Chain
● Lows and Sentiment: The briefing shows that during this round of personnel expectation turbulence, Bitcoin's price fell to its lowest point since last November, with key technical support continuously breached, and market sentiment quickly shifted from "oscillating digestion" to "panic defense." On the trading floor, spot selling pressure and contract reductions intertwined, funding rates fell, and buying intentions clearly retreated, with short-term traders switching from "buying the dip" to "reducing positions on rebounds," clearly reflecting risk aversion.
● Polarized Imagination of Interest Rate Attitudes: In the absence of a candidate list, the market could only oscillate between two extreme scenarios: one end is a more hawkish imagination—higher real interest rates, faster balance sheet contraction, and a longer period of tight credit conditions; the other end is a dovish narrative—slowing down tightening, being more restrained or even moderately relaxing financial conditions. In the face of insufficient information, funds often tend to preemptively price in the "more hawkish" path, leading to harsher discounts on high-beta assets (such as Bitcoin, Ethereum, and long-duration tech stocks).
● High-Beta Retreat and Liquidation Chain: In this scenario, funds first retreated from high-beta crypto assets, prioritizing the sale of smaller, more volatile coins and leveraged positions, with a general choice to reduce leverage multiples and increase margin ratios in the short term. Although the briefing did not provide specific liquidation amounts, it can be confirmed that the derivatives market, characterized by high leverage, was the first to be affected, with the risk of forced liquidation amplified as prices rapidly declined. Some strategies that originally relied on upward trends to "roll over" were forced to passively shift to "capital preservation first" under the pressure of personnel uncertainty.
On-Chain Whales Self-Rescue: $109 Million USDT Shifts to Defense
● Large USDT Transfer to Aave: The briefing indicates that during the peak of panic sentiment, Trend Research, under Yi Lihua, transferred $109 million USDT to the lending protocol Aave for hedging operations. This action occurred as Bitcoin broke below last November's low, at a time when the market was highly anxious about the interest rate path. By depositing large amounts of stable funds (USDT) into a leading lending protocol, they aimed to earn relatively stable interest income while leaving room for maneuvering through protocol-level liquidity for subsequent adjustments, reflecting an urgent switch from "offensive positions" to "defensive positions."
● Heavy ETH Holdings and Unrealized Loss Pressure: The same source shows that Trend Research holds 661,272.65 ETH on-chain, with current unrealized losses of approximately $192 million (the briefing specifies this as single-source data, requiring further cross-validation from more channels). Such a large single-asset exposure, under the conditions of severe price volatility and compounded policy uncertainty, forms a real pressure test: if ETH prices further decline, not only will unrealized losses continue to expand, but it may also touch the safety boundaries of some collateralized lending positions.
● Style Switch and Policy Repricing: From "fully invested trend trading" to "collateralized lending defense," Trend Research's operations reflect the institutional approach to repricing policy risk: previously relying more on a one-sided upward narrative, leveraging high positions to amplify profits; now, in the face of high ambiguity regarding personnel and interest rate paths, they have shifted to depositing large amounts of USDT into Aave and using mainstream assets like ETH as collateral, creating a liquidity buffer and shifting the trading logic from "earning beta" to "preserving net value." This visible on-chain style migration provides an intuitive sample for observing how institutions digest macro uncertainty.
Mining Companies Shift to Ethereum: Mining Business Becomes Ecological Footnote
● Bitcoin Mining is No Longer "Optimal": According to the briefing, Bit Digital CEO Sam Tabar publicly stated, "Bitcoin mining is no longer the most capital-efficient choice." This statement carries significant implications in the traditional mining business model: as Bitcoin price volatility increases, electricity and equipment costs remain high, and macro interest rate uncertainty raises capital costs, the capital efficiency of continuing large-scale investment in a single computational asset begins to be systematically questioned.
● Full Transition to the Ethereum Ecosystem: Against this backdrop of macro and policy uncertainty, Bit Digital announced a full transition to the Ethereum ecosystem, with the timing closely overlapping with Trump's accelerated announcement of the Federal Reserve Chair nomination, forming a stark contrast. From "earning Bitcoin block subsidies + transaction fees" to betting on diverse income within the Ethereum ecosystem—including validator rewards, staking rewards, and potential value-added around L2 and application layers—the business logic of mining companies has shifted from a single-chain, single-income source to a more flexible ecological cash flow structure.
● From Subsidies to Ecological Bets: In an environment where the interest rate path is unclear, the decision-making logic of mining companies is changing: previously focused on arbitrage between "fixed block subsidies" and short-term electricity costs, they are now forced to consider longer-term ecological development, sustainability of transaction fees, and incentive design at the protocol level. The diverse fee sources within the Ethereum ecosystem are seen as a hedge against the diminishing single Bitcoin block subsidies; and as the Federal Reserve's personnel decisions impact global capital expenditure and financing capabilities, this strategy of migrating from hardware-intensive, pure computational businesses to "protocol dividends + ecological growth" becomes a form of defense reserved for mining companies.
Kazakhstan Steps In with $350 Million: Sovereign Funds Reverse Course
● $350 Million National-Level Funding: During the same period when institutional whales were busy hedging, the briefing revealed that the Kazakhstan National Investment Company (NIC) decided to allocate $350 million in initial funding for a national cryptocurrency reserve fund, positioning it as a long-term allocation tool at the national level. While this amount may not seem large for a single fund, it sends a clear signal to the crypto market, which is in a period of macro policy uncertainty: sovereign funds have not completely retreated due to the uncertainty surrounding the Federal Reserve personnel, but rather have chosen to initiate positions amid volatility and panic.
● Indirect Allocation Through Intermediaries: NIC head Timur Suleimenov clearly stated that they would "indirectly allocate crypto assets through selected institutions," rather than directly engaging in specific coin and strategy choices. This model emphasizes the professional selection and custodial arrangements of intermediary institutions, rather than direct participation in frontline trading by the state. Through this structural design, Kazakhstan retains the upside participation rights in the new asset class while maintaining a certain distance from short-term price volatility in operational terms, reducing political and regulatory sensitivity.
● Contrast Between Passive Hedging and Active Positioning: On one side, institutions like Trend Research are transferring large amounts of USDT on-chain and compressing risk exposure; on the other side, Kazakhstan is establishing a long-term reserve fund with sovereign funds at the $350 million level. The two present a stark contrast: the former is "passive defense" in response to rising policy uncertainty, prioritizing how to endure the potential arrival of high interest rates and tight credit cycles; the latter is "active positioning," attempting to leverage price discounts and long-term opportunities during the same period of rising uncertainty. The global attitude towards crypto assets is showing divergence from both institutional and sovereign dimensions: some are reducing leverage, while others are increasing their base positions.
From Chair Selection to On-Chain Games: Where is the Next Shockwave?
This round of turmoil outlines a complete transmission chain: Trump's sudden advance of the Federal Reserve Chair nomination time, in the context of "candidate blank—policy path difficult to price," triggered intense market imaginations about future interest rates and liquidity environments; this "personnel expectation" was quickly translated into "interest rate imagination," compounded by the inherent high volatility of crypto assets, ultimately manifesting in Bitcoin dropping to last November's low, with high-beta assets like Ethereum facing fund withdrawals and leverage contractions; on the on-chain level, actions such as Trend Research transferring $109 million USDT to Aave, Bit Digital shifting to the Ethereum ecosystem, and Kazakhstan's NIC deploying $350 million in sovereign funds to build positions, showcase the diverse responses of global funds under the same macro shock.
The real key uncertainties remain unresolved: first, the specific policy orientation of the ultimately nominated Federal Reserve Chair, their preferences for balancing inflation and employment, and their tolerance for balance sheet contraction and expansion still lack verifiable information, and the briefing explicitly prohibits any speculation on the candidate list and nomination probabilities; second, whether sovereign funds starting from Kazakhstan will form a broader "national-level allocation wave," or if it is merely an isolated experiment, is still under observation, with insufficient data to support optimistic or pessimistic conclusions.
Looking ahead, three possible paths can be roughly outlined: if the new Federal Reserve Chair is generally hawkish, the market will continue to price around the fundamentals of high interest rates and weak liquidity, and crypto assets may be forced to seek support for "real cash flow" and "application landing" in a harsher funding cost environment, with funds further concentrating from high-leverage, high-beta assets to leading blue-chip and protocol projects; if the Chair is dovish, maintaining restraint or even moderately relaxing financial conditions under the premise of controlling inflation, the improvement in liquidity expectations may reignite risk appetite in the crypto market, potentially activating a new cycle of "liquidity—narrative—price" ahead of time; and in a more realistic and tricky "swing path," the Federal Reserve repeatedly adjusts its stance between data and political pressure, with market expectations for interest rates and policies continuously torn, crypto assets may remain in a long-term environment of high volatility and low predictability, with the balance between liquidity, allocation, and narrative becoming the core issue that all participants will face in the next stage.
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