Could Bitcoin Rally if Fed Chair Jerome Powell Resigns?

Rumours have been circulating on X (formerly Twitter) today that US Federal Reserve Chair Jerome Powell could be on the verge of stepping down, potentially under pressure from President Donald Trump. While there’s been no formal confirmation, the speculation alone has markets watching closely. And in the world of crypto, the big question is: what would that mean for Bitcoin?

Trump, Powell, and a Tense Relationship

The buzz stems from a recent White House meeting—Trump’s first official sit-down with Powell since returning to office. Reports suggest the President urged Powell to cut interest rates, pointing to international competitors like China. Powell, however, stood firm, noting that rate decisions must be guided by economic data, not politics.

This isn’t the first time Trump has clashed with Powell. He’s publicly criticised the Fed Chair before, even floating the idea of firing him—a move he later walked back. But his comments continue to suggest he'd prefer someone more aligned with his monetary agenda.

What Happens if Powell Does Resign?

Well… a resignation would mark a major shift in US monetary leadership—and potentially clear the path for a more dovish Fed chair. Lower rates would inject liquidity into markets, likely weaken the US dollar, and (as we've seen historically) support upward momentum in risk assets like Bitcoin.

But there’s a flip side. Removing a sitting Fed Chair, especially under political pressure, could spook markets and erode confidence in the independence of the Federal Reserve. As crypto investor Anthony Pompliano put it this week: “Two wrongs don’t make a right.” He warned that the move would shake investor trust in US financial institutions, something Bitcoin, ironically, was created to hedge against.

Bitcoin recently hit a new all-time high of AU$173,000 (US$112,000) before pulling back around 6%. It’s currently trading at roughly AU$163,000 (US$106,000). Some indicators suggest that the correction may be losing momentum, but if an unexpected event - such as Powell’s departure - occurs, it could add fuel to the fire and potentially push Bitcoin to fresh record highs.

The bottom line is that Powell hasn’t resigned, and according to his recent comments, he wouldn’t step aside even if asked. But if that changes, the market’s reaction, particularly Bitcoin’s, could be swift. Whether driven by expectations of rate cuts, a weaker dollar, or a wider loss of faith in traditional monetary policy, Bitcoin stands to benefit from the uncertainty.

As always, we’ll be watching closely. Stay tuned.