Bitcoin Surges 10% Amid Powell Resignation Speculation

The crypto market is currently experiencing a significant rally, with Bitcoin reaching new heights. This surge is partly attributed to the potential resignation of Federal Reserve Chair Jerome Powell, as suggested by a Trump administration official. The market is abuzz with speculation that President Donald Trump may replace Powell with a more dovish candidate, which could further boost the crypto market.

This speculation comes amid mounting tension between the Fed and the Trump administration. Trump has consistently pushed for aggressive interest rate cuts to support the nation’s growth, particularly as tech stocks and crypto markets reach historic highs. Trump recently cited surging tariffs revenue and a strong economy as reasons the Fed should have slashed rates by at least 3 percentage points, arguing that inflation is cooling faster than expected. However, Powell has resisted such calls, warning that the new tariffs could actually reignite inflation and weaken the U.S. dollar—positions that have increasingly put him at odds with the current administration.

If Powell were to step aside, Trump would likely appoint someone more aligned with his economic philosophy, significantly increasing the chances of multiple rate cuts before the end of 2025. For risk assets like Bitcoin and other cryptocurrencies, which are already enjoying a bull run, such a shift could trigger another wave of inflows and drive prices even higher. Investors are now watching closely, as a shake-up at the top of the Fed could redefine monetary policy direction—and further fuel the already blazing crypto rally.

The rally began to gain momentum after the Federal Reserve published its meeting minutes, indicating a split among officials on the pace of interest rate cuts. This uncertainty was interpreted by the market as a green light for riskier assets, including cryptocurrencies. The influx of cash into Bitcoin ETFs, totaling $1.18 billion in a single day, has been a major driver of this rally. This significant inflow is the largest single-day inflow of the year, highlighting the growing interest in Bitcoin as an investment vehicle.

The potential replacement of Powell by Trump has added another layer of excitement to the market. Analysts expect that a new Fed chair, appointed by Trump, would likely take a softer stance on monetary policy. This dovish approach could lead to lower interest rates, making riskier assets like Bitcoin more attractive. Additionally, the 'One Big Beautiful Bill Act', which could raise the federal deficit, is seen as another potential boost for Bitcoin, as it may increase the demand for alternative investments.

The rally has also been fueled by short liquidations, where traders who bet against Bitcoin were forced to buy back their positions as the price spiked. This domino effect has added more fuel to the fire, pushing Bitcoin's price even higher. Ether, the second-largest cryptocurrency, has also benefited from this rally, climbing nearly 6% to $2,976.90.

However, the rally is not without its risks. The market could still stall if there are significant developments in global markets. Additionally, the seasonal effect of summer, which typically sees less trading from equity funds, could lead to a period of consolidation or increased volatility for Bitcoin. Despite these potential headwinds, the current momentum in the crypto market remains strong, driven by the potential for a more dovish Fed and growing institutional interest in Bitcoin.