Bitcoin’s roughly 50% drawdown has less to do with cycle déjà vu than a deeper 
break in the market’s old playbook, according to Jeff Park, partner and CIO at 
ProCap Financial, who argues a prospective Kevin Warsh-led Federal Reserve 
could catalyze a regime shift in how Bitcoin trades. In an conversation with 
Anthony Pompliano, Park said he believes Bitcoin has been in a bear market 
“for quite a bit,” and warned that the familiar reflexive framework, easier 
policy, more liquidity, higher BTC, has stopped doing the explanatory work it 
once did. What Kevin Warsh Means For Bitcoin Park’s starting point was a blunt 
claim: the assumed linkage between Bitcoin and global liquidity has “been 
broken for quite some time.” He pointed to what he described as steadily 
rising global liquidity through 2025, citing Michael Howell’s tracking and 
estimating the level at roughly $170 trillion, alongside broad-based strength 
in other asset classes. “Asset prices have all gone up,” Park said, 
referencing a “frenzied rally” in metals and corporate credit spreads near 
all-time lows, before adding: “there actually is a lot of reasons to think 
that Bitcoin should have also already participated, but it didn’t.” Related 
Reading: Bitcoin Crash On Feb. 5 Was Historic: The Numbers Behind The Selloff 
That divergence, he argued, is why investors should stop leaning on backward- 
looking heuristics that have become psychological crutches. In his telling, 
crypto markets have repeatedly assumed history would re-run—altcoin rallies 
after bitcoin rallies, a durable four-year cycle, and the idea that QE or 
lower rates reliably lift BTC. “It’s worth remembering that there’s things 
that are constantly changing about the world where everything looks a little 
bit different than the way you had modeled it before,” he said. From there, 
Park reframed the debate around his “negative rho” versus “positive rho” 
Bitcoin framework. The former is the risk-asset version most investors 
recognize: rates down, risk up, Bitcoin up. The latter is the endgame: Bitcoin 
rising as rates rise, effectively challenging the notion of a stable “risk- 
free” rate by calling into question the credibility of the monetary order 
itself. “This is the mythical elusive perfect holy grail of what Bitcoin is 
meant to be,” Park said of positive-rho Bitcoin. “What it’s undermining is the 
risk-free rate itself. In that world, what we’re saying is actually because 
the risk-free rate is not the risk-free rate. Because the dollar hegemony is 
not the dollar hegemony and we are no longer able to price the yield curve in 
the ways we’ve known that means we need something different… and bitcoin is 
that hedge.” Park suggested the market may be inching toward that worldview as 
US policymaking becomes more explicitly about system repair, not incremental 
tweaks. He described the current US administration as attempting to “wrestle 
control of the economy away from the Federal Reserve” via deregulation, tax 
cuts, tariffs, and efforts to weaken the dollar, leaving the Fed “on their 
back foot” amid shifting “tectonic plates” across policy channels. Absolutely 
enjoyed recording this, even though we of course wish prices were higher. For 
those who have been listening to our show (monthly going forward), the fact 
that we are in a bear market won&#8217;t come as a big surprise. Still, Bitcoin can 
survive all this! Listen below 👇 https://t.co/JSrKOw5QLY — Jeff Park 
(@dgt10011) February 5, 2026 That’s where Park placed Warsh, a former Fed 
governor and, in Park’s telling, a rare combination of institutional fluency 
and technological conviction, as potentially pivotal. Park recounted an 
interaction from 2021 or 2022 in which Warsh expressed enthusiasm for Bitcoin 
while criticizing “phonies” who treat tech as “magic.” Warsh, Park said, 
“truly believed deep in his heart that this isn’t magic… that it actually is 
going to solve a lot of problems and bring efficiencies and Bitcoin is a core 
part of that cultural fabric.” Related Reading: PlanB Lays Out Four Bitcoin 
Bear-Market Scenarios Crucially, Park emphasized Warsh is not an anti- 
institution wrecking ball. Instead, he portrayed Warsh as someone who 
understands why the Fed’s legitimacy has been challenged and how it might be 
rebuilt. One line, Park said, has “always stuck” with him: “inflation is a 
choice.” Park contrasted that with Fed communication that, in his view, 
sometimes treats inflation as something that merely happens due to tariffs or 
war, rather than an outcome of policy tools and mandates. For Park, a Warsh 
appointment matters less because it guarantees easier policy and more because 
it could accelerate a rethink of Fed–Treasury coordination. He said he is 
“optimistic about the possibility of a new Fed Treasury accord that Bessant 
and Warsh can rewrite,” arguing the heart of the issue is the Triffin dilemma 
and the tension between the dollar’s external reserve role and internal saver 
role. “It’s not that we need fed independence,” Park said. “We actually need 
Fed interdependence with the Treasury.” The irony, in Park’s framing, is that 
“more accommodative policies may in fact actually not be the catalyst” for 
Bitcoin’s next bull phase. Instead, he argued Bitcoin’s bid ultimately 
strengthens when the world feels less like “peacetime” and more like 
“wartime”, when industrial, military, and fiscal policy dominate, 
centralization pressures rise, and capital controls become more plausible. The 
people who “need Bitcoin,” he said, are not US investors with endless 
alternatives, but those facing constraint and censorship. If Park is right, 
Warsh isn’t bullish for Bitcoin because he’ll deliver a familiar liquidity 
wave. He’s bullish because a Warsh-era Fed, paired with a Treasury aligned on 
system-level reform, could push markets toward the “positive rho” regime, 
where Bitcoin’s value proposition is less about riding stimulus and more about 
challenging the architecture that made stimulus necessary in the first place. 
At press time, BTC traded at $66,396. Featured image created with DALL.E, 
chart from TradingView.com

Kevin Warsh Will Trigger Bitcoin Regime Shift, Jeff Park Says

XRP momentum is accelerating as Bitrue deepens integration, rolls out new 
RLUSD trading pairs, and doubles down on positioning traders for a potential 
market recovery, reinforcing XRP’s role as a core growth asset in crypto 
markets. Bitrue Expands XRP and RLUSD Strategy as Adoption Optimism Builds 
Growing optimism around XRP adoption gained momentum as crypto […]

Bitrue Expands XRP Infrastructure as 10 New RLUSD Pairs Go Live

The surge in Google search activity for &#8220;Bitcoin&#8221; led Bitwise’s head of 
Europe, André Dragosch, to claim that “retail is coming back.”

Google search volume for ‘Bitcoin’ skyrockets amid BTC price swings

The NFT market recorded $58.34 million in sales volume over the past week, 
falling 20.34% from the previous period. NFT buyers climbed 21.97% to 296,018, 
while sellers jumped 24.63% to 270,495. Transaction volume decreased 4.33% to 
660,674. The overall crypto…

NFT sales plunge 20% to $58.3 million as Bitcoin price struggles at $70,000

Strategy’s leadership is pushing back against growing concerns that the 
world’s largest corporate holder of Bitcoin (BTC) could face serious financial 
stress as the cryptocurrency’s price continues to slide. Speaking after the 
company released its fourth‑quarter results, CEO Phong Le sought to reassure 
investors that the firm remains well-positioned, even as Bitcoin fell close to 
$60,000 on Thursday. Bitcoin Sell‑Off Tests Strategy’s Financial Resilience 
Bitcoin dropped roughly 50% since reaching all‑time highs of $126,000 in 
October of last year, a period during which Strategy, formerly known as 
MicroStrategy, was aggressively accumulating the digital asset. The sell‑off 
has weighed heavily on the company’s share price. Strategy’s stock, trading 
under the ticker MSTR, sank to about $104 on Thursday, its lowest level since 
August 2024, after plunging more than 17% during the session. Related Reading: 
Bitcoin Crash Exposes Colossal Corporate Losses — Here’s Who’s Most Impacted 
For now, investors are focused on two key factors: the price of Bitcoin itself 
and Strategy’s ability to meet its financial obligations if the downturn 
deepens. Those questions loomed large as founder Michael Saylor and CEO Phong 
Le addressed analysts during the firm’s earnings call. Much of the attention 
centered on how Strategy would navigate a prolonged “Bitcoin winter,” should 
one materialize. Saylor has already taken steps to bolster the company’s 
financial flexibility, including raising a $2.25 billion cash reserve to cover 
preferred dividend payments totaling $888 million annually. However, investors 
remain uneasy about the company’s $8.2 billion in low‑ and zero‑interest 
convertible bonds, which could begin facing early redemptions starting in 
September 2027, particularly now that MSTR shares have fallen sharply. 
Politics, Leverage, And Valuation In Focus Saylor reiterated that the company 
is keeping its options open, including the possibility of selling Bitcoin if 
market conditions require it. He also framed crypto investing as inseparable 
from politics, pointing to President Donald Trump’s pro‑crypto stance and 
noting that Trump’s nominee for Federal Reserve (Fed) chair, Kevin Warsh, is 
viewed as supportive of digital assets. Still, Bitcoin fell through its 
post‑2024 election lows on Thursday, reflecting skepticism that the federal 
government will actively support Bitcoin purchases. Treasury Secretary Scott 
Bessent reinforced those doubts this week, telling Congress he lacks the 
authority to rescue Bitcoin markets. On the balance‑sheet front, CEO Phong Le 
addressed worries about Strategy’s leverage. He said the company operates with 
roughly one‑third the leverage of a typical high‑yield firm. Related Reading: 
Bitcoin Crashes Below $67,000 As Stifel Warns Of Potential Drop To $38,000 
According to Le, Bitcoin would need to decline by about 90% for Strategy’s 
Bitcoin reserves to merely equal the value of its convertible debt. Even in 
that extreme scenario, he said, the company would explore restructuring 
options if it could not convert the debt into equity. Strategy’s own 
disclosures show an enterprise value of about $49.95 billion, compared with 
roughly $45.33 billion worth of Bitcoin on its balance sheet. Enterprise value 
includes the company’s market capitalization, preferred shares, and 
convertible bonds, minus cash. If Bitcoin drops once again near $63,000, 
Strategy’s market cap of $35.57 billion would need to fall about 13% from its 
recent closing price of $106.99 to eliminate the valuation premium over its 
Bitcoin holdings. However, since Thursday’s crash, both Bitcoin and Strategy’s 
stock have made a significant recovery. Bitcoin, for example, has surged to 
around $69,256. MSTR has recovered above $130, marking a 20% increase in less 
than 24 hours and offering short-term relief. Featured image from OpenArt, 
chart from TradingView.com

Cryptocurrency price in AUD