Bitcoin held its ground on Friday as investors weighed the possibility of a significant shift at the Federal Reserve. Reports suggest that former President Donald Trump is considering replacing Fed Chair Jerome Powell, a move that could dramatically alter the central bank’s stance on interest rates and liquidity.
Midweek, the Dow Jones Industrial Average surged over 300 points, and crypto markets felt the ripple effect. Bitcoin edged up to a high of $107,250 before pulling back slightly to hover around $106,950.
Markets are interpreting the situation as a potential pivot. If Powell is ousted in favor of someone more inclined to cut interest rates, risk assets like Bitcoin and Ethereum could benefit. The U.S. dollar dipped to a three-year low while bond yields retreated—both signs pointing toward a more accommodative monetary environment. For crypto investors, the implications are significant.
Trump Eyes Fed Overhaul
Multiple sources report that Trump is actively exploring replacements for Powell, whose term is set to expire in 2026. Although no official decision has been announced, Trump has allegedly discussed potential successors with his inner circle. His long-standing criticism of Powell’s policies, coupled with mounting inflation concerns and the pressure of an election year, could be accelerating the process.
The market reaction was swift. Traders began to price in a more dovish Fed, anticipating lower rates and looser financial conditions—an environment that typically favors crypto. Bitcoin, often seen as a hedge against currency debasement, tends to perform well when the dollar weakens and interest rates fall.
Bitcoin Treads Carefully
Bitcoin traded between $106,145 and $107,250 on Friday, ending the day near $106,950. It wasn’t a breakout move, but it reflected growing market attention. Ethereum and other leading cryptocurrencies also inched upward in subdued fashion. Investors remain cautious, recognizing that talk of replacing the Fed chair is one thing—executing it is another.
Stocks Rally First, Crypto Follows
The upbeat tone began in equity markets. The Dow jumped over 300 points, with the S&P 500 and Nasdaq not far behind. Tech stocks led the charge, fueled by easing Treasury yields and a broader belief that rate hikes are off the table for now. That optimism bled into crypto markets, where sentiment often mirrors the broader appetite for risk.
Crypto Investors Watch Washington Closely
Uncertainty still looms. Powell remains at the helm, and no successor has been officially named. But even the hint of a leadership shake-up at the Fed is enough to sway markets. For crypto traders, any change in the macroeconomic outlook—especially regarding monetary policy—is a crucial signal. As Washington weighs its next move, Bitcoin and the broader crypto market will be watching closely.