Fed’s Powell Firing Boosts Bitcoin as Traders Eye Rate Cuts
Momentum is building for the removal of Federal Reserve Chair Jerome Powell amid reports of a White House–backed search for a successor and Republican confirmation. On-chain and prediction-market indicators surged: Polymarket odds for Powell’s firing rose to 26% from 16%, while Representative Anna Paulina Luna publicly confirmed that his departure is imminent.
Former President Donald Trump cited $2.5 billion renovation costs at the Fed’s Eccles Building as justification for firing. Critics warn that undermining central bank independence could damage U.S. creditworthiness and destabilize markets. Treasury Secretary Scott Bessent acknowledged a formal replacement process, and Fed critic Bill Pulte hinted Powell may even resign.
Traders view a potential dovish successor as bullish for Bitcoin. A new Fed chair leaning toward rate cuts and halting balance-sheet runoff could flood liquidity into markets. Bitcoin price is currently about 4.5% below its record high near $123 000. Crypto market cap stands at $3.68 trillion.
Bullish
If Powell is ousted and replaced by a dovish Fed chair, lower interest rates and the end of balance-sheet runoff are likely. In the short term, this expectation drives bullish sentiment and higher trading volumes in Bitcoin as investors anticipate increased liquidity and cheaper financing. Over the longer term, sustained rate cuts could channel more capital into risk assets, underpinning a broader crypto bull market. Historical data shows Bitcoin rallies on dovish Fed signals. Traders therefore view these political developments as a bullish catalyst for Bitcoin prices, expecting renewed momentum toward all-time highs.