Bitcoin on Edge: How Trump’s Potential Fed Shake-Up Could Rock Crypto Markets

Fed Chair Powell's job hangs in the balance as Trump circles—and Bitcoin traders are bracing for impact.

When the White House sneezes, crypto catches cold. With Trump reportedly considering replacing Powell, the Fed's delicate dance with inflation could turn into a mosh pit—and Bitcoin's price action won't be spared.

The ultimate irony? The 'decentralized' asset still trembles at centralized banking decisions. Some revolution.

Trump Moves Toward Possible Fed Overhaul

Reports from multiple outlets say Trump is seriously considering replacing Powell before his term ends in 2026. Though no official announcement has been made, sources suggest Trump has discussed potential successors with advisors. His criticism of Powell’s policies isn’t new, but the recent rise in inflation concerns and election-year pressure may be accelerating the timeline.

The market response was immediate. Traders began to price in a more dovish Fed policy, which generally means lower interest rates and increased liquidity. That WOULD be good news for crypto, which has languished under tighter monetary conditions throughout the last year. Bitcoin, which is often used as a hedge against fiat debasement, likes to rally when the dollar declines and rates come down.

Bitcoin Price Reacts With Caution

Bitcoin was trading at 106,950 Friday, with a daily high of 107,250 and a low of 106,145. It wasn’t a breakout, but it was a clear sign of rising interest. Ethereum and other top coins saw similar quiet moves upward. Traders are treading carefully, knowing that talk of replacing the Fed chair is one thing, but actually doing it is another.

The bullish mood started with equities. The Dow surged more than 300 points, while the S&P 500 and Nasdaq also closed higher. Tech stocks led the rally, pushed by falling Treasury yields and hopes that rate hikes are off the table for now. That Optimism spilled into crypto markets, where risk sentiment plays a big role.

There’s still a lot of uncertainty. Powell is in office, and no formal replacement has been named. But the fact that President Trump is entertaining the idea is already moving markets. Crypto investors are especially sensitive to changes in the macro outlook, and this could be a key one.

Featured image from Saul Loeb/AFP/Getty Images, chart from TradingView