Bitcoin held steady last Friday, but things could be about to change. President Trump is reportedly considering replacing Federal Reserve Chair Jerome Powell, which could dramatically alter the Fed’s approach to interest rates and money supply.
The Potential Shake-Up
Multiple news sources say Trump is seriously thinking about replacing Powell before his term ends in 2026. While nothing’s official yet, whispers of potential replacements are circulating. Trump’s criticism of Powell’s policies is nothing new, but rising inflation and the upcoming election seem to be speeding things up.
Market Reaction: A Cautious Rally
The market reacted swiftly. Traders started betting on a more “dovish” Fed (meaning lower interest rates and more readily available money). This is generally good news for cryptocurrencies, which have struggled under tighter monetary policies recently. Bitcoin, often seen as a hedge against inflation, tends to do well when the dollar weakens and interest rates fall.
Bitcoin traded around $106,950 on Friday, hitting a high of $107,250 and a low of $106,145. It wasn’t a huge jump, but a noticeable upward movement. Ethereum and other major cryptocurrencies showed similar, subtle gains. Traders are being cautious, though, because replacing the Fed chair is easier said than done.
Stocks Surge, Crypto Follows Suit
The positive mood started with the stock market. The Dow Jones soared over 300 points, with the S&P 500 and Nasdaq also closing higher. Tech stocks led the charge, fueled by falling Treasury yields and hopes that interest rate hikes are on hold. This optimism spread to the crypto market, where investor sentiment is heavily influenced by broader market trends.
Crypto’s Washington Watch
Uncertainty remains. Powell is still in charge, and no replacement has been announced. But the mere possibility of a change is already impacting markets. Crypto investors are highly sensitive to shifts in the overall economic outlook, and this potential Fed shake-up is a big one to watch.
