This year, with a new Federal Reserve Chair, the implications go beyond policy directions—they directly impact the survival of the entire crypto ecosystem. Is it a return of the bull market or liquidity exhaustion? My experience surviving three bear markets tells you that this power shift hides the secret to survival.

**Whoever controls the Federal Reserve, controls the market trend**

Three potential successors, three completely different scenarios unfolding.

The first option is Janet Yellen, the Chair of the National Economic Council, a typical dove. If she takes over, a rate cut cycle is almost certain. Referring to the easing periods of the three rate cuts in 2025, liquidity will flow back into risk assets. The scene of Bitcoin monthly gains could reappear, with DeFi and AI sectors becoming the focus of capital chasing.

The second option is former Fed Governor Waller, a hawk among hawks. Once in office, high interest rates might last until 2027. It sounds like the nightmare triggered by the balance sheet reduction in 2018, but in hindsight, the forced liquidation after high leverage actually paved the way for a genuine long-term bull run.

The third variable? Whoever wins, the Fed will have to learn to "walk the tightrope." U.S. debt has already surpassed $34 trillion, a figure that’s pressing down. Sooner or later, liquidity will be released. Easing cycles won’t disappear—it's just a matter of time. The crypto market will ultimately benefit from this wave of liquidity.

**Three possible futures in 2026**

Optimistic scenario (about 30% probability): Inflation quickly recedes, the Fed cuts rates twice in a row, and market sentiment soars. Bitcoin breaks through the previous high of $120,000, altcoins rally in turn. At this point, focus should be on deploying DeFi protocols and AI-related crypto applications.

Moderate scenario (about 50% probability): Policy swings cause intense volatility, with Bitcoin oscillating between $80,000 and $100,000. This kind of market is ideal for grid trading players or hedging with options to lock in risk exposure.

Risk scenario (about 20% probability): If inflation rebounds along with signs of economic recession, the Fed will be forced to raise interest rates. The market will ruthlessly sell off all high-risk assets. At this moment, either hold stablecoins ready to buy the dip or keep cash waiting for undervalued assets to emerge.

**My survival rules**

Position allocation must not be lazy. I personally allocate 30% of my funds to spot dollar-cost averaging, rain or shine. Another 20% is in short-term government bonds for risk hedging. The remaining 50% is diversified across different market cap crypto assets, with regular adjustments.

The key is psychological resilience—volatility is normal, and panic is the biggest enemy. My experience coming out of bear markets is that the market always gives you a second (or even third) chance. As long as you’re alive, there’s a possibility to turn things around.