What Trump’s resignation as Fed Chair Did Mean for Bitcoin and US Economy

Analysts tell Decrypt that the extraordinary action would likely cause the American political system to become in upheaval if President Donald Trump made good on the visible threats to flame Federal Reserve chair Jerome Powell. However, had Ethereum benefit from it as well? &nbsp,

Trump, who has repeatedly lobbied Powell to lower interest rates for days, said the Fed chair’s dismissal” cannot come quickly enough.” No U.S. president has actually gone so far as to flame its leadership, at least since the central bank gained functional independence in 1951, despite leaders frequently having disagreements with the Fed, which controls monetary policy. &nbsp,

Analysts warned that if Trump attempted to defy that well-established standard, it might have a devastating impact on traditional banking markets and, in addition, would improve Bitcoin’s value proposition.

It may set a terrible precedent for the executive branch to be able to influence the organization that controls the country’s money supply, according to Juan Leon, a top investment strategist at Bitwise. However, I believe it would have a significant impact on Bitcoin.

Leon further stated that Powell’s fire would likely weaken confidence in the base of the nation’s economy, sending the price of bonds and equity markets downward. However, this exact same deterioration of faith in the stability of the United States economic system, which has been a constant for almost a century, may gradually increase Bitcoin’s value.

” Solution stores of value that are independent of government deception would become even more desirable,” he said. &nbsp,

In such a situation, Leon compares Bitcoin to silver. The unique material has reached record highs in recent months as the White House pursues affluent tax policies, which have shocked the world market. This is fueled by a panicked search for long-lasting stores of value.

” The rise in gold in this business environment is a bullish indicator of where Bitcoin will come when the economic dust of all of this settles,” Leon said. &nbsp,

VanEck’s head of digital assets research, Matthew Sigel, acknowledged that Powell’s firing could lead to a devastating “loss of confidence in American institutional stability,” a state that is “more prevalent in emerging markets than in the reserve currency economy.”

Sigel also claimed that this development would benefit Bitcoin over the long run.

His prediction was that Bitcoin’s fixed, apolitical monetary policy might appear more attractive in comparison if markets start to price political turnover at the Fed every four years.

However, over the past few years, Bitcoin has shown that it is vulnerable to significant changes in traditional financial markets. Despite the ostensibly alternative nature of digital currencies, recent market volatility, for instance, has rocked the entire crypto market, including Bitcoin.

Given that the price of Bitcoin “often gets dragged down” with the stock market, a major market event like Powell’s firing could have an immediate impact on the currency. However, he argued that if BTC did fall in such a scenario with cratering TradFi markets, which he is not entirely convinced of, then the synergy would likely only be temporary.

Given the absence of any prior experience and the high stakes surrounding it, it is unclear whether Trump will actually decide to fire Powell.

However, a White House official said the president was reportedly considering whether to take the necessary action on Friday. And since taking office, Trump and his Republican allies in Congress have been actively working to undermine the Fed’s independence, most recently through crypto policy.

Holders of crypto assets besides Bitcoin might not have much to cheer about if the president decides to fire his Fed chief in the end. According to Leon, cryptocurrencies like Ethereum and Solana will likely suffer if there is a breakdown in trust in the stability of the U.S. economy because the regulatory framework for them is less stable. &nbsp,

He claimed that the market’s perception of government manipulation would have a more negative impact on other assets besides Bitcoin.

edited by Andrew Hayward