President Donald Trump has openly discussed firing Federal Reserve Chair Jerome Powell, raising questions about the consequences for the U.S. economy. Analysts suggest that this move could shake up the American political system. But could it have a surprising effect on Bitcoin?
Trump has been pushing Powell to lower interest rates for weeks, without success. On Thursday, he said the Fed chair’s firing “cannot come fast enough.” While conflicts between presidents and the Fed are common, no president has ever taken such drastic action since the central bank gained independence in 1951.
If Trump follows through on his threat, the fallout could be severe. Experts warn that disrupting the central bank’s leadership could devastate traditional financial markets. However, this turmoil might also boost Bitcoin’s appeal.
Juan Leon, an investment strategist at Bitwise, pointed out the potential risks of such a decision. “It would set a bad precedent for the executive branch meddling with the central bank,” he said. “But I think it could be very positive for Bitcoin.”
Leon explained that Powell’s firing would erode trust in the U.S. economy, which could send both equity and bond markets into a downward spiral. This loss of confidence in America’s financial system might make alternative assets like Bitcoin more attractive.
He compared Bitcoin to gold in this scenario. As the U.S. government continues its aggressive tariff policies, gold has surged in value. Leon believes Bitcoin could experience a similar rise in value, as investors seek assets independent of government control.
Matthew Sigel, head of digital assets research at VanEck, echoed this sentiment. He said the firing could lead to a “loss of confidence in American institutional stability,” which is typically seen in emerging markets, not in the world’s reserve currency economy.
Sigel also argued that Bitcoin’s fixed, apolitical monetary policy could make it more appealing if markets start fearing political instability at the Fed.
However, Bitcoin’s performance is not immune to the swings of traditional financial markets. The crypto market has recently felt the effects of volatility tied to U.S. tariff policies. Leon acknowledged that Bitcoin might initially drop if markets react negatively. But he believes that any downturn would likely be short-lived.
In conclusion, while Trump’s intentions remain uncertain, the potential consequences of firing Powell could have a lasting impact on both the U.S. economy and Bitcoin’s future.
For more business updates, visit DC Brief.
