Bitcoin Surges 6% to $93,000 as Trump Backtracks on Powell, Tariffs

Bitcoin experienced a significant surge, rising 6% to trade above $93,000 on Wednesday. This rally came after US President Donald Trump backtracked on his threats to remove Federal Reserve Chair Jerome Powell and hinted at a potential reduction in tariffs on Chinese imports. Trump's remarks, made from the Oval Office on Tuesday, indicated a shift in his stance, stating that he had "no intention of firing" Powell. He also suggested that the tariffs imposed on China could be substantially reduced, although he clarified that they would not be eliminated entirely.

This reversal marked a notable change from Trump's earlier statements, where he had labeled Powell a "major loser" and hinted at firing him. The president has frequently criticized the Fed for not lowering interest rates quickly enough, despite having nominated Powell to lead the central bank in 2017. Markets reacted promptly to Trump's comments, with Bitcoin reaching $93,055 and extending its weekly gains to over 11%. US stock futures also saw an increase, with the Dow, S&P 500, and Nasdaq futures rising during after-hours trading.

Cryptocurrencies like Bitcoin often see gains during periods of perceived policy uncertainty or declining confidence in traditional financial systems. Trump's recent criticisms of the Fed, coupled with indications of political interference, likely boosted demand for decentralized assets that operate independently of central bank control. Trump's comments followed reports that National Economic Council Director Kevin Hassett had raised legal questions about the president's ability to remove Powell, which had unsettled markets and raised concerns among economists about undermining the Fed's autonomy.

The Fed has maintained a cautious approach to further rate cuts, citing inflation that remains above its 2% target. Last week, Powell warned that the White House's escalating tariffs could drive prices even higher. Trump responded by criticizing Powell's stance and escalating threats to remove him. However, on Tuesday, Trump walked back those statements, telling reporters, "The press runs away with things. No, I have no intention of firing him."