Bitcoin has struggled to break out in recent months despite hitting a fresh all-time high in May and fears building over a $37 trillion “ticking time bomb.”
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The bitcoin price rocketed higher following U.S. president Donald Trump’s November election victory but has struggled to hold onto that momentum as Federal Reserve chair Jerome Powell grapples with a looming, “cataclysmic” crisis that’s headed for the U.S. dollar.
Now, as Tesla billionaire Elon Musk quietly backs a shock dollar collapse warning, Trump has confirmed a decision on the next Federal Reserve chair will be coming out soon, priming the bitcoin price and crypto market.
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U.S. president Donald Trump has said he’s going to announce his replacing for Federal Reserve chair … More
“It’s coming out very soon,” Trump told reporters on Air Force One, it was reported by Reuters, referring to his pick for the next Fed chair.
“If we had a good Fed chairman, he would lower rates and if inflation happened in a year from now or two years later, [he would] raise rates,” Trump said in a video posted to X, reiterating his earlier calls for Fed chair Powell to cut interest rates immediately.
The Federal Reserve is now overwhelmingly expected to keep rates on hold during its June and July meetings, with the market split over its September decision, according to the CME FedWatch tool.
Trump added that former Fed governor Kevin Warsh, who’s currently the front-runner to be named as next Fed chair on the crypto-powered prediction platform Polymarket, is “very highly thought of,” when asked what he thought of him.
Last month, Warsh outlined how he believed the Fed could lower interest rates if he shrunk its balance sheet, telling a monetary policy panel at Stanford University’s Hoover Institution that “if the printing press could be quiet, we could have lower policy rates.”
If the Fed were to cut rates, it “would be bullish for risk assets like bitcoin,” bitcoin price and crypto market analysts with the Bitfinex exchange said in emailed comments.
“We believe if bitcoin maintains support above $105,000, it could target the $120,000 to $125,000 range in June. This will not be catalysed just from the labour market but it could be a domino in multiple catalysts prompting the Fed to cut rates at a faster than expected pace.”
This week, Trump again called for Powell to lower rates, which have been held steady for months after the Fed surprised markets by beginning its rate cutting cycle in September.
The Fed has pointed to the looming impact of Trump’s global trade tariffs as the reason it has left rates on hold, predicting Trump’s so-called Liberation Day barrage of tariffs will cause inflation to spike.
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The bitcoin price has rocketed higher since Donald Trump’s election victory but the bitcoin price … More
This coming week, the latest U.S. consumer price index (CPI) inflation data is expected to show an uptick in prices after inflation eased in the first few months of 2025.
In April, the White House confirmed Trump was exploring whether he could fire Federal Reserve chair Jerome Powell over Powell’s refusal to lower rates, though Trump has since said he won’t try to remove Powell before his term as chair ends next year.
“With rate cuts looking less likely, Fed chair Jay Powell can expect to remain firmly in the president’s firing line,” Nicholas Hyett, investment manager at Wealth Club, said in emailed comments and pointing to Friday’s stronger than expected jobs data.
“That will be taken as vindication by the Trump administration–which has been clear that the tariffs are aimed squarely at supporting Main Street rather than pleasing Wall Street. Less positive from the White Houses’ point of view is that a strong economy and rising wages gives the Federal Reserve less reason to cut interest rates–pushing yields a touch higher and making the fiscal splurge built into Trump’s “Big Beautiful Bill” that bit more expensive.”
