Warsh's Hawkish Tone Could Spark Bitcoin Selloff Amid FOMC Meeting

Bitcoin's price is expected to be affected by Federal Reserve Chair Kevin Warsh's first FOMC meeting, which may lead to a selloff in the cryptocurrency. The market has already priced in a 3.50-3.75% rate hold at a 97.4% probability per the CME FedWatch tool, but it's Warsh's impending forward guidance that remains the true market driver.

The pattern of Bitcoin's price movement following FOMC meetings has hardened over the past two years, with the cryptocurrency falling after seven out of eight meetings in 2025. This trend continued into 2026, with every single rate hold triggering a post-event decline regardless of the specific language used in the statement.

One reason for this pattern is that significant capital inflows and leverage build up ahead of FOMC events, thinning spot liquidity and amplifying volatility once the decision is handed down. Additionally, Bitcoin spot ETFs have been accompanied by net outflows or negligible inflows during most FOMC event windows since their launch in January 2024.

With May CPI running at a hot 4.2%, Chair Warsh has fundamental economic grounds to lean hawkish and reinforce expectations that interest rates will stay elevated for longer, putting pressure on risk assets and leaving investors to question whether the Fed will kill the broader equity relief rally.