Federal Reserve Chair Powell's Tenure Ends Amid Crypto Market Speculation

Federal Reserve Chair Jerome Powell's tenure is reportedly coming to an end, according to a statement made by Rep. Anna Paulina Luna. Luna's confirmation that Powell's firing is imminent has sparked significant reactions within the crypto markets. The prediction market odds of Powell's ouster surged to 26 percent, the highest reading this year, up from 16 percent just 24 hours earlier. This development has led to speculation about the potential impact on the crypto markets and the broader economy.

Treasury Secretary Scott Bessent acknowledged that a formal process to identify Powell's successor has already begun. President Donald Trump has repeatedly criticized the renovations at the Federal Reserve's Eccles Building, which have become the legal pretext for Powell's potential dismissal. Trump allies have alleged "inefficiency" and "neglect of duty," two of the three causes for removal spelled out in the Federal Reserve Act. Powell has requested the Fed's inspector general to reopen its review of the project.

Bill Pulte, the Federal Housing Finance Agency head and a longtime Powell critic, confirmed the rumors, stating that he had heard from a credible, bipartisan source that Powell is considering resigning. This aligns with reports and discussions in Washington, D.C.

Crypto markets have yet to show a significant reaction to the rumors, with Bitcoin prices remaining relatively stable. However, the long-term implications for the crypto markets could be profound. Macro commentator Julian Figueroa described the potential removal of Powell as a "bullish catalyst" for Bitcoin, suggesting that the "façade" of central-bank independence collapsing could drive up crypto prices. Long-time trader Byzantine General echoed this sentiment, noting that a more accommodating successor to Powell could lower interest rates, which would be bullish for cryptographic currencies.

If President Trump succeeds in replacing Powell with a more accommodating successor, the Federal Reserve would likely be forced to shelve its balance-sheet runoff as Washington ramps up fresh fiscal stimulus. This synchronous pivot away from quantitative tightening would flip the liquidity regime from drain to deluge, recreating the macro backdrop that powered the crypto market’s 2020-21 vertical ascent and positioning it for the next major bull run.