Bitcoin News Today: Bitcoin Rises on Trump's Fed Chair Hints, Short Squeeze Intensifies

Bitcoin Surges 5% as Trump's Remarks Influence Market Sentiment

Bitcoin surged nearly 5% on Monday, squeezing short positions as U.S. President Donald Trump's comments on his upcoming selection of the next Federal Reserve Chair sparked optimism in the cryptocurrency market. The move followed a broader rally in risk assets as investors speculated on potential rate cuts and a more dovish Federal Reserve under a possible Kevin Hassett-led administration.

The cryptocurrency's rise came amid growing anticipation that Trump will name a Fed Chair before the Christmas holiday. Treasury Secretary Scott Bessent suggested, as much, stating there is a strong chance the announcement will happen soon. With the current Fed Chair, Jerome Powell, set to leave in May 2026, the market is bracing for a policy shift that could favor lower interest rates and a more crypto-friendly stance.

Market analysts point to improving global M2 money supply, a 92% probability of a December rate cut, and the likelihood of ending quantitative tightening as key drivers for Bitcoin's rebound.

Coinbase Institutional cited these factors in a recent report, noting that while macroeconomic conditions are aligning favorably, Powell's upcoming remarks could still temper gains.

Trump's Pro-Crypto Stance and Hassett as a Leading Candidate

Trump's public support for cryptocurrencies and his emphasis on reducing interest rates has positioned the next Fed Chair as a critical variable for Bitcoin's price trajectory. In a recent interview, he stated his desire to ensure the U.S. remains the "crypto capital of the world," reinforcing bullish sentiment among investors.

Kevin Hassett, the National Economic Council director and leading candidate for the Fed Chair, has signaled a potential shift toward a more dovish monetary policy. Hassett, who previously served as a researcher at the Fed, has indicated he would reduce the agency's staff influence, suggesting a departure from the current approach. This has raised expectations that a Hassett-led Fed may adopt a more accommodative stance, potentially boosting Bitcoin and other risk assets.

Market Reactions and Analyst Insights

Bitcoin's recent rally reflects broader market optimism about the Fed's upcoming policy decisions. The December 10 interest rate decision will be a pivotal moment, with analysts noting that a rate cut paired with the end of quantitative tightening could trigger a short-term Santa rally. However, investors are cautious, as hawkish remarks from Powell could temper the gains.

Ethereum also saw gains following BlackRock's filing for an iShares Staked Ethereum Trust ETF, a move that could further institutionalize crypto investing. Meanwhile, a $100 million long position on Ethereum, attributed to a high-profile trader known as the "Trump Tariff Whale," signaled strong confidence in the asset's potential to break key resistance levels.

Chris Kim of Axis emphasized that macroeconomic factors remain the primary drivers of the market. He noted that the market has already retested the $80,000 level for Bitcoin and that positive developments, such as Vanguard's ETF trading approval, are encouraging further participation.

Key Takeaways for Investors

The next few weeks will be crucial for Bitcoin and the broader crypto market. The Fed's December 10 rate decision, coupled with Trump's expected announcement on the next Fed Chair, will shape investor sentiment and market volatility.

While the current outlook appears favorable, investors should remain cautious. Powell's post-decision press conference will be closely watched for any hints about 2026 monetary policy. Additionally, any unexpected geopolitical events or hawkish statements could disrupt the anticipated rally.

For now, the alignment of macroeconomic tailwinds, rising global liquidity, and a potential policy shift under a Trump-aligned Fed Chair are creating a bullish environment for cryptocurrencies. However, market participants must stay attuned to central bank signals and geopolitical developments to navigate the evolving landscape.