Curbed by the edge of an apocalyptic price shock, cryptocurrency markets scramble for a floor as the White House confirms President Donald Trump has set his sights on potentially removing Federal Reserve Chair Jerome Powell. Alongside the unprecedented move, market chaos stemming from Trump’s trade wars has incited fears for Bitcoin and crypto on the whole.
Trump’s Fed Fury: A Threat to Market Stability
In the aftermath of Trump’s unapologetically protective tariff strategies, the crypto sphere has a new and potentially more volatile issue to grapple with: a bearish prediction of recession from billionaire Ray Dalio has already painted a doomsday picture surpassing the 2008 financial crisis, and now the prospect of core U.S. central bank leadership being removed only adds fuel to the flames.
When approached by reporters regarding the potential termination of Powell, Trump’s economic advisor Hassett did little to dismiss the idea. Instead, he mentioned that “the president and his team will continue to study that matter.” As vague as this answer is, it has become rather clear to the markets and added a new level of uncertainty.
Trump himself has unleashed on Powell in public and vented his frustrations on Truth Social, stating, “Powell’s termination cannot come fast enough.” This statement was made right after Powell restated his policy to keep interest rates high, citing the volatility stemming from Trump’s ongoing trade war as the reason for the rate hold.
Resonating the Warning: “Nobody Is Safe”
Controversial Trump-supporting Democrat Elizabeth Warren has suggested the possibility of Trump taking action towards Powell with the foreboding phrase “nobody is safe” as her counter to the question posed by Trump allegedly planning to act on his threat. This suggests a united concern from both ends of the spectrum that the situation at hand is indeed very serious and has a great chance of deeply impacting the markets.
The “Apocalyptic Scenario:” Everything Is On The Verge of Collapse
Market analysts have been sent into a frenzy after learning the news of a possible presidential move regarding the dismissal of the Federal Reserve chair. Bilal Hafeez, chief executive of investment research firm Macro Hive, didn’t sugarcoat what he thinks“would be a huge, huge shock, telling The Telegraph,. Overall, it would almost be like an apocalyptic scenario for the market.” Such articulations display the underlying mindset regarding the Fed’s independence and governance deterring politics that could plunge the nation into a financial catastrophe.
Bitcoin Struggles To Be Considered A Safe Asset
Even more surprising is the fact that Bitcoin’s price movements, which are characterized as highly speculative due to their volatility, have this time diverged from gold’s. Gold has seen massive increases in value as investors rush towards more reliable assets, fleeing the storm of inflation. This begs the question: Is Bitcoin still a viable option during extreme economic uncertainty? Some advocates continue insisting that Bitcoin will one day decouple from the confidence crisis in traditional markets and will take its place as “digital gold,” but its recent correlation to the weak stock market tells a different story.
Waiting for the Fallout: The Market’s Unnerving Standstill
Currently, Bitcoin and the wider cryptocurrency market are at a standstill, floating somewhere between a politically triggered financial crisis and the optimism that cooler heads will prevail. The next few days and weeks will be especially telling as to whether or not Trump’s threats regarding the Fed actually do something and what the final outcome will be in the already fragile ecosystem of digital assets.
