Prediction Markets Surge for Pro-Crypto Fed Chair Candidate Hassett
Meta Description: Prediction markets on Polymarket and Kalshi show soaring odds for Kevin Hassett, a former Trump adviser with deep crypto ties, to become the next Federal Reserve Chair, signaling potential seismic shifts for U.S. crypto policy.
Introduction: A Market Bet on a Crypto-Friendly Fed
In a striking development for the intersection of finance and digital assets, prediction markets are signaling a potential sea change at the helm of the United States Federal Reserve. According to real-time data from platforms Polymarket and Kalshi, Kevin Hassett—former Director of the National Economic Council under President Donald Trump—has emerged as the clear favorite to replace Jerome Powell as the next Federal Reserve Chair. At the time of writing, the contract for Hassett filling the seat has spiked to 66% on Polymarket and 74% on Kalshi. This surge is directly tied to Hassett's well-documented, pro-crypto background, including a past role on Coinbase’s advisory council, a disclosed seven-figure stake in the exchange, and his leadership of a White House digital asset working group. For a crypto industry long accustomed to regulatory headwinds from Washington, the possibility of a sympathetic figure leading the world's most influential central bank represents one of the most consequential political developments in its history.
Kevin Hassett’s Unprecedented Crypto Credentials
Kevin Hassett is not a typical candidate for the austere office of Federal Reserve Chair. A long-time Republican policy economist, Hassett returned to Washington as Trump’s top economic adviser and has now emerged as the market-implied frontrunner to lead the Fed. His connection to the cryptocurrency industry is both deep and unusually transparent for a potential central bank chief.
His financial disclosure reveals at least a seven‑figure stake in Coinbase Global Inc. and compensation for serving on the exchange’s Academic and Regulatory Advisory Council. This places him in a unique category: a potential Fed chair with direct financial and advisory ties to one of the largest and most regulated crypto entities in the United States. This background suggests a foundational understanding of digital asset markets that is largely absent among current senior Fed officials. His leadership of the White House’s digital asset working group further indicates he has been directly engaged in high-level policy discussions concerning the sector.
A Cautionary Tale: The Ghost of Gary Gensler
However, the crypto community has been burned before by placing faith in resumes that appear crypto-literate. The precedent of Gary Gensler’s tenure at the Securities and Exchange Commission (SEC) serves as a powerful cautionary tale. Gensler arrived at the SEC with significant blockchain credentials, having taught a course on the subject at the Massachusetts Institute of Technology (MIT). Market participants initially hoped his technical understanding would lead to nuanced, supportive regulation.
Instead, Gensler’s SEC has presided over a wave of high‑profile enforcement actions against major crypto firms. Critics of this approach have branded it “Operation Chokepoint 2.0,” suggesting a coordinated effort to restrict the industry’s access to the traditional banking system. This history underscores that a candidate’s stated knowledge or past associations do not guarantee favorable policy outcomes. A Hassett-led Fed might be more open to experimentation and less reflexively hostile to bank‑crypto activity, but the institution’s core mandates—price stability and maximum employment—alongside its concerns for financial stability, mean markets should not assume a one‑way bet on deregulation.
Internal Fed Dynamics: The Battle Over Supervision
The surge in Hassett’s odds coincides with visible internal tensions at the Federal Reserve regarding its supervisory approach, particularly toward novel financial activities like crypto. The Fed’s own framework has recently received pushback from veterans within the system.
On November 18, the Federal Reserve released new Supervisory Operating Principles that shift examiners toward a “risk‑first” framework. This directive aims to focus staff on material safety-and-soundness risks rather than procedural or documentation issues, a move some interpret as creating more flexibility for banks engaging with emerging technologies.
However, this shift is not universally supported. In a speech the same day, Fed Governor Michael Barr—who earned his reputation as one of the architects of what critics call “Operation Chokepoint 2.0” during his previous role at the Treasury Department—issued a warning. Barr argued that narrowing oversight, weakening ratings frameworks, and making it harder to issue enforcement actions could leave supervisors slower to act on emerging risks, potentially repeating pre‑financial crisis mistakes.
Caitlin Long, founder and CEO of Wyoming-based Custodia Bank and a prominent advocate for crypto-friendly regulations, commented on X regarding this dynamic: “If this comes true & Hassett does become Fed chairman, anti-#crypto people at the Fed who still hold positions of power will finally be out (well, most of them anyway). BIG changes will be coming to the Fed.” She specifically noted that while Barr “was Vice Chairman of Supervision & Regulation he did Warren’s bidding,” and he “has made it clear he will oppose changes made by Trump & his appointees.”
The internal divide was further highlighted days later when, in Consumer Affairs Letter 25‑1, the Fed clarified that the new Supervisory Operating Principles do not apply to its Consumer Affairs supervision program—an area under Governor Barr’s committee purview. This indicates that any incoming chair would inherit an institution already mid‑pivot on how hard (and where) it leans on banks, with entrenched bureaucratic battles already underway.
The Role and Scale of Prediction Markets: Polymarket vs. Kalshi
The source of this headline-making data itself is noteworthy. Two prediction markets are driving this narrative: Polymarket, a decentralized platform operating on Polygon, and Kalshi, a U.S.-regulated exchange for event contracts. Their role in forecasting political events has grown significantly, offering real-time sentiment data that often moves faster than traditional polling or punditry.
While both platforms show Hassett as the overwhelming favorite, there is a discrepancy in their implied probabilities: 66% on Polymarket versus 74% on Kalshi at the time of writing. This variance can be attributed to several factors, including different user demographics, liquidity pools, and regulatory frameworks governing each platform. Kalshi’s status as a federally regulated U.S. exchange may attract a different set of traders than Polymarket’s global, crypto-native user base. The convergence of both platforms on Hassett as the frontrunner, however, lends significant credence to the trend. Their growing influence demonstrates how decentralized finance (DeFi) mechanisms and novel financial instruments are becoming primary sources for market intelligence on geopolitical events.
Strategic Conclusion: Navigating a Potential Paradigm Shift
The dramatic rise in Kevin Hassett’s odds to become Federal Reserve Chair represents more than just a political betting novelty; it is a market signal anticipating one of the most significant potential regulatory shifts for cryptocurrency in the United States. A Hassett appointment would likely initiate a profound cultural change within the Federal Reserve System, moving it from an institution often perceived as skeptical or hostile toward digital assets to one led by a chairman with direct experience and financial interest in the sector.
For market participants, several key watchpoints emerge from this analysis. First, observers should monitor whether these prediction market odds solidify or fluctuate as political appointments near. Second, attention must be paid to the ongoing internal debate at the Fed between risk-focused supervision championed by some and the stricter oversight framework defended by officials like Governor Michael Barr. This bureaucratic struggle will shape the landscape any new chair inherits. Finally, while Hassett’s background is uniquely pro-crypto, his actions would be constrained by the Fed’s statutory mandates and its role in maintaining systemic financial stability.
The ultimate lesson from this development is that regulatory risk—long considered one of crypto's greatest headwinds—is itself becoming tradable and quantifiable through prediction markets. Whether or not Kevin Hassett ultimately assumes the role, his surge in these markets underscores that cryptocurrency policy is now a central plank in macroeconomic and political forecasting, irrevocably linking the future of digital assets to the highest echelons of traditional financial power.
Source: Polymarket Money; Related: Crypto-friendly Trump adviser Hassett top pick for Fed chair: Report; Related: Caitlin Long’s crypto bank loses appeal over Fed master account; Magazine: EU’s privacy-killing Chat Control bill delayed — but fight isn’t over.