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What Trump’s Attacks on Jerome Powell Could Mean for Crypto

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Donald Trump is ramping up his criticism of the Federal Reserve, and it could have a big impact on Bitcoin's price.

Features writer

Connor Sephton

Features writer

Connor Sephton

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Connor Sephton is a journalist based in London, who also works for Sky News and the BBC as a radio newsreader and online reporter. He has covered crypto since 2018 — reporting from major conferences...

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Last updated:

April 17, 2025

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Donald Trump is stepping up his attacks on Federal Reserve chairman Jerome Powell — and the turmoil could have significant ramifications for crypto.

The U.S. president has repeatedly expressed frustration at Powell’s refusal to cut interest rates, and wants the economist to step down before his term expires in May 2026.

In a combative post on Truth Social, Trump upped the ante by declaring: “Powell’s termination cannot come fast enough!”

Yet some of those within the president’s inner circle, including Treasury Secretary Scott Bessent, have warned firing him could destabilize financial markets further.

A standoff is emerging. While Trump has suggested that Powell would leave his role if asked, the Fed chief has insisted that this isn’t the case.

At this point, it’s worth looking at why the White House doesn’t have the power to dismiss the head of America’s central bank. A chair can only be fired for cause — and the Fed is meant to be independent and free of political interference.

But it’s clear that Trump is determined to change all this. After he dismissed senior officials at two independent agencies, the Supreme Court is examining whether they should be reinstated. Should the case go in the president’s favor, that could theoretically allow him to assert control over the Fed and show Powell the door.

Bessent isn’t the only one worried about how this could impact the U.S. economy. Senator Elizabeth Warren, a Trump critic and a deep crypto skeptic, has warned Wall Street will crash if presidents have this power.

She told CNBC that handing vital economic levers “to a president who just wants to wave his magic wand” would make it hard to differentiate America “from any other two-bit dictatorship around the world.”

It’s fair to say that investors are already panicked following the never-ending, will-he-won’t-he round of tariffs against major economies. Aggressive sell-offs have caused the dollar to weaken substantially. Not only does this eat into the profits of foreign firms selling products in the U.S., but it makes imported items even more expensive for domestic consumers.

The Fed last cut interest rates back in December 2024, with Powell repeatedly saying that he wants compelling evidence of cooling inflation before doing so again. By comparison, the European Central Bank has already slashed its main rate three times so far in 2025 — and this is the source of Trump’s frustration.

Despite all of this uncertainty, there are those who argue that a diminished dollar could be advantageous for Bitcoin in the medium to long-term. Real Vision founder Raoul Pal has long believed that a weaker greenback encourages investors to try and preserve wealth through alternatives like BTC.

Yet this hasn’t been reflected in recent price action. Until last year, Bitcoin would often rise whenever the U.S. dollar index fell. But despite the DXY plunging by 8.5% in the year to date — its worst performance since 2005 — BTC is also nursing a loss of 9.5%.

Should Trump succeed in his wish to fire Powell, and should this move send the stock market into freefall, it’s highly likely that Bitcoin would tank too — with equities and cryptocurrencies showing a strong correlation of late.

Zooming out beyond BTC, a recent New York Times opinion piece by Economic Security Project chair Chris Hughes warned that U.S. consumers should pay very close attention to Trump’s attacks on the Fed. He wrote:

“The U.S. government would face significantly higher borrowing costs on the trillions it needs in coming years. Household budgets would be hit by higher borrowing costs, too, and by rising inflation.”

Hughes went on to warn that — even when Trump’s turn is over — consumer prices could spiral out of control, with the dollar’s status as the world’s reserve currency all but ground to dust.

At this stage, avid Bitcoiners would argue that this is a good thing. They would point to how consumers in Latin American nations ravaged by hyperinflation have already turned to BTC to preserve their wealth. And they would insist that such a move could reinforce Bitcoin’s narrative as a hedge against inflation.

But let’s make one thing clear: it is impossible to know exactly how Trump’s campaign against Jerome Powell will end — and the impact it’ll have on the crypto markets. In the space of just three short months, traders have already been caught by surprise on multiple occasions… from the president’s refusal to buy new BTC for a strategic reserve, and his worse-than-expected push for tariffs against China.

There are no guarantees that this will be a net positive for Bitcoin.