How Trump Firing Fed Chair Jerome Powell Might Impact Bitcoin and Crypto Prices

The potential for President Donald Trump to fire Federal Reserve Chair Jerome Powell has sparked intense debate, with significant implications for Bitcoin and the broader crypto market. Such a move could reshape monetary policy, influence global economic dynamics, and drive both opportunity and uncertainty for digital assets. With Bitcoin reaching $123,000 in July 2025 and the crypto market cap hitting $4 trillion after the GENIUS Act recently passing and being signed into law, the stakes are high.

This article explores how replacing Jerome Powell could impact cryptocurrencies, balancing short-term volatility with long-term shifts in adoption and regulation.

Short-Term Volatility

The immediate aftermath of firing Powell would likely trigger sharp market reactions, driven by sentiment and speculation. Trump’s pro-crypto policies, including the $TRUMP memecoin launch in January 2025 and the strategic Bitcoin reserve executive order in March, could fuel optimism. A new Fed Chair aligned with Trump’s vision, such as former Fed Governor Kevin Warsh, might signal looser monetary policies or even direct crypto integration, like expanding the strategic Bitcoin reserve. This could push Bitcoin prices up by 10-20% within days, potentially reaching $135,000 to $147,000, while altcoins like Ethereum and Solana might climb 15-30% due to increased institutional interest.

However, uncertainty could also dominate the short term. Firing Powell, a figure tied to Fed independence, might spark legal battles or debates over central bank autonomy, leading to a risk-off sentiment. A historical precedent from 2018, when Trump’s criticism of Powell’s rate hikes triggered a 20% Bitcoin drop, suggests a possible 10-15% dip if markets perceive instability. Global central banks, such as the ECB or China’s PBOC, might react negatively, viewing the move as dollar weaponization, which could lead to a 5-10% crypto sell-off tied to dollar strength.

Long-Term Potential

In the longer term, a Trump-aligned Fed Chair could accelerate crypto adoption. The proposed strategic Bitcoin reserve, backed by Senator Cynthia Lummis, might drive Bitcoin to $150,000-$200,000 within 12-18 months as institutional players like Michael Saylor’s Strategy expand their holdings. Clearer regulations under a pro-crypto Fed could also boost global adoption, particularly in developing markets like Pakistan, where crypto use could rise significantly. Treasury Secretary Scott Bessent’s July 2025 comments suggest stablecoins could strengthen the dollar’s reserve status, potentially growing the crypto market to $6-8 trillion by 2027.

Yet, risks remain over the longer horizon. Eroding Fed credibility could spike inflation. A politicized Fed might also prompt global competitors like China to advance rival digital currencies, challenging Bitcoin’s dominance. The 2023 ScienceDirect analysis showing a negative correlation between Fed tightening and Bitcoin prices underscores these vulnerabilities, suggesting a potential 10-15% long-term drag if global trust in U.S. policy wanes.

The outcome hinges on key factors, including the stance of Powell’s replacement and the legal fallout of such a move. A crypto-skeptic appointee could dampen enthusiasm, while a figure like Warsh, rumored as a candidate in July 2025, might amplify bullish trends. Legal challenges, potentially escalating to the Supreme Court, could delay policy shifts, leaving markets in limbo. Global responses, particularly from China or the EU, will also shape crypto’s trajectory, with coordinated or rivalrous actions influencing adoption.

Trump’s ability to fire Powell remains uncertain. The Supreme Court’s May 2025 ruling questions the constitutionality of such a move, and the Fed’s independence, backed by figures like Senator Thom Tillis, adds a protective layer. Without clear evidence of misconduct, such as from the DOJ’s investigation into Powell’s renovation scandal, a firing would likely face judicial review. For now, Powell’s position appears secure, but Trump’s administration continues to test these boundaries, keeping markets on edge.

The crypto market stands at a crossroads. A successful replacement of Powell with a pro-crypto figure could ignite a rally, building on Trump’s policies to drive Bitcoin and altcoins to new heights. However, legal, economic, and global uncertainties pose risks of sharp corrections.