Trump's Potential Crypto-Friendly Fed Chair: Implications for Bitcoin and Risk Assets

The U.S. Federal Reserve’s next chair could reshape the trajectory of Bitcoin and risk assets in ways not seen since the 2008 financial crisis. With President Donald Trump’s shortlist of 11 candidates—including Rick Rieder of BlackRock, Chris Waller, and Michelle Bowman—the crypto market is bracing for a potential shift in regulatory and monetary policy. These candidates, all with crypto-friendly stances, signal a departure from Jerome Powell’s cautious approach, which has historically framed Bitcoin as a speculative asset akin to gold rather than a transformative financial innovation [1].

Dovish Monetary Policy and Bitcoin’s Tailwinds

Rick Rieder, a top contender, has explicitly stated that Bitcoin is “here to stay” and could become a core part of institutional asset allocations [2]. His dovish monetary policy views—advocating for rate cuts to stimulate economic growth—align with Trump’s economic agenda. Rieder has argued that the Fed’s recent rate hikes have had minimal impact on inflation, as corporations rely less on borrowing for investment [3]. If appointed, his leadership could accelerate the adoption of Bitcoin as a portfolio diversifier, particularly in a low-interest-rate environment where risk assets gain appeal [4].

Chris Waller, another candidate, has taken a more technocratic approach. At the 2025 Wyoming Blockchain Symposium, he dismissed fears around crypto payments, calling them a “natural technological evolution” with no inherent risks to the banking sector [5]. Waller’s emphasis on stablecoins as tools to enhance the U.S. dollar’s global role suggests he might support regulatory frameworks that facilitate their integration into the financial system [6]. This could indirectly boost Bitcoin’s utility, as stablecoins often serve as on-ramps for crypto adoption.

Regulatory Clarity and Institutional Adoption

Michelle Bowman’s proposal to allow Fed staff to invest in small amounts of crypto is perhaps the most radical. By fostering firsthand experience with digital assets, she aims to bridge the gap between regulators and the technology they oversee [7]. This pragmatic approach could lead to more nuanced policies, reducing the regulatory uncertainty that has stifled institutional investment in Bitcoin. For example, BlackRock’s management of Bitcoin and Ethereum ETFs under Rieder’s leadership already signals growing institutional confidence [8].

The implications for Bitcoin are clear. A Fed chair who views crypto as a legitimate asset class could expedite the approval of spot ETFs, a long-sought milestone for the market. Such a move would likely trigger a surge in institutional capital flows, mirroring the 2021 ETF-driven rally in equities. Moreover, Waller’s and Bowman’s advocacy for innovation-friendly policies could reduce the “reputational risk” banks face when offering crypto services, further normalizing Bitcoin’s role in the financial ecosystem [9].

Risk Assets in a New Monetary Era

The broader market for risk assets—ranging from equities to venture capital—could also benefit. A dovish Fed under Rieder or Waller would likely prioritize economic growth over inflation control, lowering interest rates and reducing the cost of capital. This environment historically favors high-beta assets, including Bitcoin, which has shown a strong inverse correlation with the Fed’s policy rate [10].

However, the risks are not negligible. A rapid shift toward crypto-friendly policies could outpace the Fed’s ability to manage systemic risks, particularly if stablecoins or DeFi platforms gain unchecked traction. Waller’s skepticism about a U.S. CBDC—arguing that private-sector solutions like stablecoins are sufficient—highlights this tension [11].

Conclusion

Trump’s potential selection of a crypto-friendly Fed chair represents a pivotal moment for Bitcoin and risk assets. While Rieder’s dovish stance and Waller’s technocratic pragmatism offer the most direct catalysts, Bowman’s regulatory innovations could lay the groundwork for long-term adoption. The market’s next move may hinge not just on the Fed’s policy rate, but on its willingness to embrace a new era of financial technology.

Source:
[1] Donald Trump Considers 11 Candidates for Fed Chair [https://coincentral.com/donald-trump-considers-11-candidates-for-fed-chair-including-crypto-friendly-picks/]
[2] Rick Rieder, BlackRock’s CIO, on Bitcoin’s Role in Asset Allocations [https://coincentral.com/donald-trump-considers-11-candidates-for-fed-chair-including-crypto-friendly-picks/]
[3] Rieder’s Comments on Fed Rate Hikes and Inflation [https://www.coinglass.com/ru/news/535232]
[4] Institutional Adoption of Bitcoin and ETFs [https://coinpedia.org/news/top-contenders-to-replace-fed-chair-as-jerome-powell-term-ends-nears/]
[5] Waller’s Wyoming Blockchain Symposium Speech [https://www.coindesk.com/policy/2025/08/20/crypto-is-nothing-to-be-afraid-of-says-fed-governor-chris-waller]
[6] Stablecoins and the U.S. Dollar’s Global Role [https://www.mitrade.com/insights/news/live-news/article-3-1057929-20250821]
[7] Bowman’s Proposal for Fed Staff to Invest in Crypto [https://www.reuters.com/sustainability/boards-policy-regulation/feds-bowman-suggests-allowing-central-bank-staff-own-small-amounts-crypto-2025-08-19/]
[8] BlackRock’s Bitcoin and Ethereum ETFs [https://coincentral.com/donald-trump-considers-11-candidates-for-fed-chair-including-crypto-friendly-picks/]
[9] Reducing Reputational Risk for Banks [https://www.jdsupra.com/legalnews/daily-financial-regulation-update-6613622/]
[10] Bitcoin’s Inverse Correlation with Fed Policy Rate [https://www.tradingview.com/news/cointelegraph:7f3dcec33094b:0-bitcoin-won-t-be-priced-in-until-trump-announces-new-fed-chair/]
[11] Waller’s Skepticism of a U.S. CBDC [https://www.bis.org/review/r210806a.htm]