Bitcoin (BTC) fell to $74,190 on Saturday, its lowest level in more than a month, despite the swearing-in of pro-crypto Kevin Warsh as Federal Reserve chairman a day earlier.
BTC/USD daily chart.
The sell-off comes as the 2-year US Treasury yield climbed to 4.14%, its highest since February 2025. That yield, closely tied to near-term rate expectations, now sits above the Fed's current 3.50%-3.75% target range, signaling markets are no longer betting on quick easing.
CME data shows traders expect the Fed to keep rates unchanged for most of 2026, with futures pricing pointing to a possible 25 basis point hike in December.
Over the past 30 years, the Fed has typically raised rates when the 2-year yield moved above the federal funds rate, as the gap suggested markets were pricing in tighter policy. Conversely, when the 2-year yield fell below the Fed funds rate, it often signaled expectations for future rate cuts. Such a shift weakens the bullish case for Bitcoin, which benefits from falling yields and easier liquidity.
While Warsh has spoken favorably about Bitcoin and opposed central bank digital currencies, analyst Crypto Patel warned: "Crypto-friendly on regulation is NOT the same as dovish on rates." He called Warsh "a known inflation hawk," noting that a difficult macro backdrop, including Iran war-driven inflation risks and labor-market pressure, may keep the Fed from cutting rates.
Historical data adds to the caution. Analyst Lucky noted Bitcoin fell 84% after Janet Yellen took over as Fed chair in 2014, 73% after Jerome Powell started in 2018, and 60% after Powell's second term began in 2022. Warsh's takeover has so far coincided with a sharp BTC decline, as traders de-risk while awaiting policy clarity.