---
title: 'It Started: Fed Chair Sends Bold Message to Crypto & AI Investors'
source: 'https://youtube.com/watch?v=r0K5dqG74As'
video_id: 'r0K5dqG74As'
date: 2026-08-06
duration_sec: 557
---

# It Started: Fed Chair Sends Bold Message to Crypto & AI Investors

> Source: [It Started: Fed Chair Sends Bold Message to Crypto & AI Investors](https://youtube.com/watch?v=r0K5dqG74As)

## Summary

The video discusses the impact of lower-than-expected US CPI data on the crypto market, leading to a rally in Bitcoin and Ethereum. It also covers the Federal Reserve's plans to finalize stablecoin rules under the GENIUS Act, and includes commentary from Fed Chair Kevin Warsh on AI's potential economic impact.

### Key Points

- **CPI Data Beats Expectations** [00:17] — June's CPI inflation fell to 3.5% (expected 3.8%), and core CPI fell to 2.6% (expected 2.8%). This is the biggest monthly drop since May 2020.
- **Fed Rate Hike Expectations** [01:01] — Fed Chair Kevin Warsh states there will be no rate hike in the foreseeable future. However, futures market implies a 59% chance of a hike at the September FOMC meeting and 81% chance by end of year.
- **Crypto Market Rally** [01:43] — Ethereum jumps 4.4% after cooler CPI data, boosting risk-on sentiment. Traders no longer expect a rate hike this month, but first hike is priced in for September or October.
- **GENIUS Act Rules Deadline** [02:13] — Fed Chair Kevin Warsh says the Fed is racing to finalize GENIUS Act (stablecoin bill) rules ahead of Saturday's deadline. The framework will cover issuance standards, asset collateral ratios, and consumer protection.
- **AI and Economic Growth** [04:21] — Warsh comments that AI technology shock is likely the biggest change in his adult lifetime, potentially leading to more productivity, wages, and job creation, citing historical examples like the internet creating Uber/Lyft jobs.
- **Hyperliquid and Phantom Meet SEC** [06:06] — Hyperliquid Policy Center and Phantom (Solana wallet) met with the SEC to discuss crypto regulation, urging the CFTC to create DeFi-specific rules that recognize user self-custody of assets.
- **Elon Musk on Crypto** [07:26] — Elon Musk states he is not going to promote crypto, but has a soft spot for Dogecoin. He says if he appears to pump crypto, it's not him.
- **Crypto Clarity Act Progress** [08:08] — Senator Cynthia Lummis announces the final text for the Crypto Clarity Act will be introduced in the next few days, with 24 days remaining before the Senate summer recess. The goal is to pass it before August recess.

### Conclusion

The video highlights a positive short-term outlook for crypto due to cooling inflation, but notes potential rate hikes later in the year. Regulatory developments like the GENIUS Act and Crypto Clarity Act could provide long-term stability and growth for the industry.

## Transcript

previous positive technology shocks, the >> Big news today for the crypto market. Bitcoin jumps on lowest US CPI data >> It's the largest negative reading since 2020 and the pandemic.
>> That's inflation, which the data suggests is coming down. So, June's CPI inflation fell to 3.5%. They were expecting 3.8. That's a much lower number, and core CPI inflation falls to 2.6%
below the expectations of 2.8. This is the biggest monthly drop since May of 2020. And while I want to update you on Elon Musk and Dogecoin, Fed chair Kevin Warsh about to announce new rules for crypto before his Saturday deadline.
Also, altcoin news, watch today's whole video. The reason that crypto, especially Ethereum, is pumping is because there's less of a chance the Federal Reserve will need to hike rates. As explained on Fox Business today,
let's listen then react. >> That's a dip in consumer prices. Surely, we're not talking now about a rate increase, are we? >> You're exactly right. There's not going to be a rate hike anytime soon. I don't
think there's going to be a rate hike into the foreseeable future, okay? That being said, you know, in a response to this good report on the CPI, this this good report on the CPI, this disinflationary report, uh the futures
market still has an implied probability, I think a 59% to a rate hike at the September meeting of the FOMC, and an 81% uh chance of Fed funds uh having been raised by the end of this year.
>> So, Ethereum jumps 4.4% after cooler-than-expected CPI data, and the crypto markets rallied as softer inflation data boosted risk-on sentiment. Traders no longer expect a Fed rate hike this month, although the
first hike is now priced in for September or October. So, a reprieve in the short term, but actually probability went up a little bit for rate hikes by the end of this year. Click subscribe to Altcoin Daily for one video per day
keeping you informed on crypto. And just in, Fed chair Kevin Warsh says the Federal Reserve is racing to finalize genius act rules ahead of Saturday's deadline. As you know, the genius act was the stablecoin bill. It already got
ago. >> A year ago on Saturday, >> A year ago on Saturday, um this the genius act was signed into um this the genius act was signed into law. And with that, uh a series of
deadlines for rules to be promulgated uh began and the clock began to tick. You came into your job confirmed uh approximately 2 months ago. Uh the deadline for the Fed to promulgate rules is this Saturday. Uh will the Fed meet
that deadline? >> Well, that's a that's a fair and open question. Uh I have been corrected. I've not been in the job 6 weeks, but 7. Um not been in the job 6 weeks, but 7. Um we're racing to to to put that out by
this deadline. I'll just add one other thing, Congressman, without uh taking I think rule makings from the bank regulators are best when we have a family fight between and among us so that there would be one proposed rule
making for comment. It might not be exactly true this time, but that's my issuing our rule makings at the same moment. >> I appreciate that. I think uh from this body, I think there's a huge opportunity
sure the consumers are protected. That was one of the drivers of us passing that legislation. >> So, Kevin Warsh is aiming to finalize the genius act stablecoin rules before Saturday, and this framework will cover
issuance standards, asset collateral ratios, and consumer protection rules for these stable coins. And again, any more rules of the road which will allow big money to feel comfortable entering the space. That will benefit the coins
that stable coins are built most off of. So, Ethereum and Solana are the two ones in America. Tron's more offshores, but this is the best for Ethereum and Sol. And by the way, the Fed chair is practically telling us we'll all be
richer as AI continues to grow. DeFi and AI is the future. Just listen. >> If this cycle, Congressman, is like the previous positive technology shocks, the
productive, there'll be more labor, there'll be more wages, there'll be more compensation. Um that is if this follows prior trends. Um this technology shock is likely more significant. This is probably the
biggest change in my adult lifetime because it's not just the creation of a new widget. What it is it's it's changing the method innovation. And I can't think of a country on Earth as well positioned to
So, that's on the one hand, but on the other hand, it can lead to disruption. My own best guess is that the advent of the technology will be augmenting
existing work. That employees that were there will be more productive. And ultimately, at the end of the day, I don't believe in the lump of labor fallacy. All the jobs that are there have already been created, and the
technology will remove some. Well, it might be disruptive in the near term, but it'll create a lot of other jobs. Just to give one example from history, Who knew at the creation of the internet
and a half Uber and Lyft drivers? I certainly didn't. >> Kevin Warsh is telling us that if possible, if possible, rates will come down, productivity will go up. It's not guaranteed, nothing is ever
guaranteed, but what they can do, they will do. That's bullish. Just in, the Hyperliquid Policy Center met with the SEC to discuss crypto regulation per a
crypto task force memo along with Phantom, the Solana wallet, the Phantom, the Solana wallet, the Hyperliquid team urges the CFTC to create DeFi specific rules that recognize users to hold their own
assets. And how this affects you and me, and why I like this is because and why I like this is because Hyperliquid and a the the blue chip Solana wallet are not sitting with their hands underneath them. They're taking
action. They're talking with the SEC, they're talking with the CFTC, which are both generally pro-crypto, and saying, "What do we need? Tell us the basic regulation, we will make this happen. We want to grow with you." And by the way,
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meaning up to $3,000, SpaceX, Micron, etc., plus loss protection. Limited time, link below. And Elon Musk on record, "I am not going
to be promoting crypto. At most, he'll mention in a joking way, but if you see crypto plummet, it's not me." Elon Musk Let's listen. >> Yeah, I mean,
promoting uh crypto. So if if if you know at most in a joking way but I'm I if you see me pumping crypto it's not >> [laughter] >> You know so
I mean I do think there's some merit in you know Bitcoin and maybe some of the other crypto and I'm I sort of have a soft spot for Dogecoin Um but
yeah I I I don't know >> And with only 24 days remaining for the US Senate to pass the crypto clarity act before their summer recess, Senator Cynthia Lummis announces that the final text for the clarity act will be
introduced in the next couple of days. >> Well it's taken us virtually every day for the last 10 months to get this bill in the condition it's to get this bill in the condition it's in today and we're ready. So we will be
introducing in the next few days. We're going to be in session now for four straight weeks. It's very important that we get this bill across the finish line before the August recess begins
August recess begins so we can make the markets aware of the stability that will be provided to them if they remain onshore in the United States to do business.
video, click subscribe. It's completely free. It costs you nothing. Literally costs you nothing and tuning in for one video per day could make you an expert video per day could make you an expert on crypto by the end of the year.