Ben Cowen discusses Kevin Warsh's new role as Fed chair, arguing inflation is a policy choice driven by money printing. He lays out a counterintuitive thesis: Bitcoin can rally even if the Fed hikes rates, because hikes would signal a strong economy. He expects a market correction in H2 2026, sees Bitcoin's four-year cycle bottom potentially in October (or summer), and frames the current crypto selloff as pricing in rate-hike fears that may not materialize.
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This is an interview between the 100XClub host and Ben Cowen, focused on the implications of Kevin Warsh becoming Fed chair, the inflation outlook, and how monetary policy flows through to crypto. **Core thesis:** Cowen's central argument is that Bitcoin can rally whether the Fed hikes or doesn't hike. If the Fed doesn't hike, the market reprices Bitcoin higher because the rate-hike fears that crushed crypto were overblown. If the Fed does hike, that signals the economy is still strong — and historically Bitcoin has risen during rate-hiking cycles (he cites 2023-2024). The late-1990s analogue is key: the Fed cut, reignited "animal spirits," then had to hike seven or eight times, and stocks kept rising anyway. …
Near-term risk-off: Cowen expects H2 2026 to bring a market correction as equities 'test' the new Fed chair, and crypto is already pricing rate-hike fears aggressively. Tactically, the pain may be front-loaded, with a potential bottom window opening around October (or summer) as the four-year Bitcoin cycle matures.
Base case over the next several months is that rate-hike fears prove overblown — either the Fed doesn't hike and risk assets reprice higher, or it does hike but the economy holds up well enough that the hike signals strength rather than stress. The Middle East situation is the wildcard that could force the Fed's hand either way.
Structurally, Cowen sees persistent monetary expansion as the default regime (inflation as a policy choice), which favors nominal asset prices over the long arc. The business cycle will eventually roll over into recession, but the topping process will be protracted and the market will signal it — don't try to front-run the turn.
If the Fed hikes rates, it signals the economy is still strong, not collapsing, which could be bullish for Bitcoin.
The speaker points to historical precedent (late 1990s) where the Fed raised rates while stocks rose, and argues Bitcoin could similarly rally. Bitcoin rose in 2023-2024 while the Fed was raising rates.
The economy has been fine and it is premature to call for a recession until you see lower asset prices that stay lower for a while.
The speaker points to labor market data (initial claims, hiring) being at pre-pandemic levels and companies being slow to lay people off.
Crypto markets are getting annihilated because rate hikes are getting priced in, regardless of whether actual hikes occur.
The speaker argues the anticipation of rate hikes is driving crypto lower, not the actual rate decision.
What does Kevin Warsh’s view on inflation and rates imply for stocks and crypto?
He says inflation is a choice because policymakers choose money printing, and that avoiding inflation would require accepting lower asset prices. He thinks Warsh is smart, but that the Fed is stuck because inflation is still too high, which makes rate cuts difficult and could pressure markets and crypto.
How would a lack of rate hikes or a future cut affect crypto?
He says if the Fed does not hike, Bitcoin could reprice higher because people are worried about something that is not happening. If the Fed does hike, crypto can still do well if the hikes signal a strong economy and the market has already priced them in.
Why might Bitcoin rally even if the Fed keeps hiking?
He argues that if the Fed can keep hiking, the economy is probably still strong, since the Fed does not hike into a collapsing economy. He points to the late 1990s, when stocks kept rising through multiple hikes, and suggests Bitcoin could be the next source of animal spirits.
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