US President Donald Trump has reignited discussions about replacing Federal Reserve (Fed) Chair Jerome Powell. This has sparked waves across traditional and crypto markets, with Bitcoin poised to reclaim $105,000.
The implications are significant, extending beyond monetary policy to the trajectory of Bitcoin, altcoins, and macro risk sentiment globally.
Trump’s Phantom Fed Chair Plan Shakes Markets
On June 6, Trump stated that his pick for the next Fed Chair is “coming out very soon,” even though Powell’s term does not officially end until May 2026.
The move would amount to a political earthquake in monetary policy circles, with Trump preparing to install a “phantom” Fed Chair-in-waiting.
Two months ago, when Trump first suggested firing Powell, the US Dollar Index (DXY) tumbled, sending Bitcoin soaring. As BeInCrypto reported, Bitcoin rallied hard as the market priced in looser monetary policy and declining confidence in Fed independence.
When Trump backpedaled in late April, Bitcoin briefly corrected, illustrating how tightly crypto assets are now tied to Fed credibility and Treasury policy.
“I have no intention of firing him…I would like to see him be a little more active in terms of his idea to lower interest rates,” Reuters reported, citing Trump telling reporters in the Oval Office on Tuesday.
Now that the Powell replacement narrative is back on the table, Bitcoin is again flashing volatility.
“This could shake markets big time. It might spark a crypto bull run or cause big drops,” said Rananjay Singh, founder of TodayCrypto.
Can Trump Even Fire Powell?
It is worth noting that legally, Trump cannot outright fire Powell as Fed Chair unless he explores legal loopholes. The Federal Reserve Act only allows a sitting Fed Chair to be removed “for cause,” which has historically meant ethical violations or gross misconduct.
However, Trump could nominate Powell’s successor well before the 2026 deadline, a strategy Scott Bessent of Key Square Capital suggested.
“…the nominee would have to wait to chair the central bank’s powerful Federal Open Market Committee, which sets one of the nation’s most important interest rates…that person’s guidance, predictions, and potential criticism of the Fed’s actions would weigh heavily on financial markets,” explained Jon Herold.
Bessent is also the United States Secretary of the Treasury. Trump has reportedly been exploring whether to fire the Fed chair.
Despite legal loopholes, some say removing him without cause would trigger legal and market chaos.
What a New Fed Chair Would Mean for Bitcoin and Altcoins
Geoff Kendrick, Head of Digital Asset Research at Standard Chartered, recently told BeInCrypto that Bitcoin is no longer just a hedge against inflation. Rather, it is now a hedge against traditional finance (TradFi) and Treasury risk.
“The threat to remove US Federal Reserve Chair Jerome Powell falls into Treasury risk—so the hedge is on,” Kendrick told BeInCrypto.
With monetary uncertainty rising, Bitcoin is increasingly viewed as a decentralized alternative to fiat-controlled systems. This is especially true in times of political interference.
“If ‘Too Late’ at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due. Biden went mostly short term. There is virtually no inflation (anymore), but if it should come back, RAISE “RATE” TO COUNTER. Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!” Trump wrote on Truth Social.
Trump feels the US would do better economically without Powell, sentiments amid rising debt. Against this backdrop, experts say Bitcoin presents as a life raft. Based on this outlook, the pioneer crypto is making a play to reclaim the $105,000 threshold.
Meanwhile, the implications extend beyond Bitcoin. Altcoins, which have lagged in 2025 amid quantitative tightening (QT) and muted rate-cut expectations, could finally get the green light for a rally.
“This is the most important news for altcoin holders. The primary reason behind altseason delay is the QT program and less rate cuts. But this might change soon… the new FED chair will definitely fulfill [Trump’s] demands. Altseason is coming,” wrote analyst Cas Abbé.
A Trump-aligned Fed Chair would likely advocate aggressive rate cuts, loosening financial conditions, and enabling the kind of liquidity that fuels crypto bull markets. Still, the potential downside remains.
“That day will be the black swan event globally if it happens,” World of Finance, a popular account on X, warned.
The move could usher in a new bull run or trigger systemic shocks.
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