In brief
- President Trump has threatened to fire Fed Chair Jerome Powell, a move with no precedent in modern U.S. history.
- Analysts say if Trump fired Powell, then traditional assets like bonds and the dollar would plummet.
- But the development could also bolster the value proposition of alternative assets like Bitcoin.
Should President Donald Trump make good on apparent threats to fire Federal Reserve chair Jerome Powell, analysts tell Decrypt that the extraordinary move would likely throw the American political system into turmoil. But could it also be bullish for Bitcoin?
On Thursday, Trump, who has unsuccessfully lobbied Powell to lower interest rates for weeks, said the Fed chair’s termination “cannot come fast enough.” While presidents often come into conflict with the Fed, which dictates U.S. monetary policy, no U.S. leader has ever gone so far as to fire its leadership—at least since the central bank became functionally independent in 1951.
If Trump attempted to break that well-established norm, the effect on traditional finance markets could be devastating, analysts told Decrypt—but also bolster Bitcoin’s value proposition.
“It would set a really bad precedent of the executive branch being able to meddle in the agency that controls the money supply of the country,” Juan Leon, a senior investment strategist at Bitwise, said. “But I think it would be very positive for Bitcoin.”
Leon elaborated that Powell’s firing would likely degrade trust in the foundation of America’s economy, sending equity and bond markets spiraling. But this very same erosion of faith in the stability of the U.S. financial system—a given for nearly a century—could eventually appreciate Bitcoin's price.
“Alternative stores of value that are independent of government manipulation would become even more desirable,” he said.
Leon likens Bitcoin to gold in such a scenario. In recent weeks, as the White House pursues aggressive tariff policies that have sent shockwaves through the global economy, the rare metal has surged to all-time highs, fueled by a panicked search for durable stores of value.
“Gold rising in this market environment is a bullish signal for where Bitcoin will go once the macroeconomic dust of all of this settles,” Leon said.
Matthew Sigel, head of digital assets research at VanEck, agreed that Powell’s firing could trigger a devastating “loss of confidence in American institutional stability,” a dynamic “more common in emerging markets than in the reserve currency economy.”
Sigel also contended that such a development could aid Bitcoin in the long term.
“If markets begin to price in political turnover at the Fed every four years, Bitcoin’s fixed, apolitical monetary policy may look more attractive in comparison,” he said.
In recent years, though, Bitcoin has shown itself to be vulnerable to major swings in traditional financial markets. Recent tariff-related market volatility, for example, has rocked the entire crypto market, including Bitcoin—despite the supposed alternative nature of digital currencies.
Bitwise’s Leon conceded that a major market event like Powell’s firing could have an immediate negative effect on Bitcoin’s price, given the asset “often gets dragged down” with the stock market. But he posited that if BTC did fall with cratering TradFi markets in such an event—something he’s not necessarily convinced of—then that synergy would likely only be short-term.
It remains unclear whether Trump actually intends to fire Powell, given the lack of precedent for such a move and the high stakes surrounding it.
But on Friday, a White House official said the president is actively studying whether to make the consequential decision. And since retaking office, Trump and his Republican allies in Congress have actively taken steps to degrade the Fed’s independence—increasingly, via crypto policy.
Should the president ultimately opt to fire his Fed chief, holders of crypto assets besides Bitcoin may not have much reason to cheer. Because the regulatory status of cryptocurrencies like Ethereum and Solana is less of a settled matter, those tokens will likely only suffer should a meltdown of faith in the stability of the U.S. economy transpires, Leon believes.
“That uncertainty inserted into the market about government manipulation would affect other assets beyond Bitcoin in a more negative way,” he said.
Edited by Andrew Hayward