Bitcoin Not Priced In Until Trump Names New Fed Chair
Economist Alex Krüger warns that Bitcoin traders have not yet factored in a more dovish Federal Reserve policy. Although markets expect a rate cut in September, Krüger says Bitcoin’s bullish potential hinges on who US President Donald Trump selects to replace Fed Chair Jerome Powell. With Powell’s term ending in May 2026, Trump is considering candidates such as Jefferies strategist David Zervos, BlackRock’s Rick Rieder and former governor Larry Lindsey. The right nominee could trigger further gains for Bitcoin, which recently pulled back 6% from its $124,128 all-time high to around $115,150. Market sentiment remains optimistic: over 83% of CME FedWatch participants predict a September rate cut, potentially unlocking sidelined retail capital.
Bullish
Krüger’s analysis suggests that the market has not yet priced in a dovish Fed shift tied to Trump’s choice for Fed chair. Historical precedent shows that dovish policy announcements, especially Fed rate cuts, tend to boost risk assets like Bitcoin. With over 83% of traders betting on a September rate cut and retail capital waiting on the sidelines, the announcement of a more dovish nominee could trigger renewed buying pressure. In both short and long term, confirming a Fed chair inclined toward lower rates should support higher Bitcoin prices by lowering opportunity costs and improving liquidity conditions.