Is Jerome Powell Good for Bitcoin? (Investor’s Guide 2025)

In recent months, news has been swirling about Jerome Powell, Chairman of the Federal Reserve and one of the most important people determining the course of the American economy.

Let’s break down how Jerome Powell impacts the price of BTC (and how the price of Bitcoin could change if he is replaced). 

Who is Jerome Powell?

Jerome Powell is the Chairman of the U.S. Federal Reserve, the government body that controls interest rates and helps steer the economy. He’s led the Fed since 2018, first appointed by President Trump and re-appointed by President Biden. 

Powell is one of the most powerful people in global finance. Powell’s decisions impact the stock market, the economy, and Bitcoin’s price.

How does the Fed impact the economy and the Bitcoin market?

The Federal Reserve plays a central role in managing economic cycles. By adjusting interest rates and controlling the money supply, the Fed seeks to either ‘heat up’ or ‘cool down’ the economy. 

These actions impact all assets including Bitcoin and other cryptocurrencies. 

Here’s how the Fed can impact the price of Bitcoin: 

• When the Fed raises interest rates, borrowing becomes more expensive, liquidity tightens, and risk assets like Bitcoin often decline. Raising interest rates can slow down the economy, but can also reduce inflation. 
• When the Fed cuts rates or injects liquidity, Bitcoin and other ‘speculative assets’ tend to rise as investors seek higher-yielding opportunities. Cutting interest rates can stimulate the economy, but can also cause more inflation. 

How did Powell’s actions during COVID-19 affect Bitcoin?

In 2020, Powell led one of the most aggressive monetary responses in Federal Reserve history. As the COVID-19 pandemic caused markets to crash, the Fed cut interest rates to near zero, launched large-scale asset purchases (quantitative easing), and introduced emergency lending programs.

These measures played a key role in stabilizing markets, but they also flooded the economy with liquidity and caused inflation to spike. 

The result was a bull market for BTC. Bitcoin, which had briefly dropped below $5,000 in March 2020, surged to over $60,000 by April 2021.

Many investors began to see Bitcoin as a hedge against inflation and currency debasement, driven in part by fears that central bank stimulus was eroding the value of the dollar. In addition, low interest rates made investors more willing to buy a ‘risky’ asset. 

While Powell’s decisions were not aimed at crypto, they created an environment that allowed BTC to reach all-time highs. 

Why do Bitcoin investors pay attention to Powell’s comments? 

Some Bitcoin investors pay close attention to Powell’s statements, as they can impact the price of BTC. 

When Powell signals that interest rates will go down, crypto markets often rally. On the other hand if he indicates that inflation remains too high and that further tightening is necessary, Bitcoin and other risk assets tend to pull back.

What has Jerome Powell said about Bitcoin?

Powell has spoken about Bitcoin and cryptocurrencies multiple times during his tenure. His comments about BTC have mostly been neutral, saying that Bitcoin was a ‘substitute for gold’ and did not threaten the dollar. 

In late 2024, Powell made headlines by stating that the Fed is not legally allowed to own Bitcoin, and that the central bank is not seeking to change that policy.

In 2025, Powell said that the crypto industry was maturing, and that the Fed would support state-chartered banks engaging with cryptocurrency as long as it was done in a ‘safe and sound’ manner. 

Why has Jerome Powell come into conflict with President Trump?

Despite appointing Powell in 2018, Trump has frequently clashed with the Fed Chair. 

During his first term, President Trump floated the idea of firing Powell after a rate hike triggered a sharp market downturn. That idea was met with backlash from financial markets, which saw any move to remove Powell as a threat to the Fed’s independence. The resulting volatility caused Trump to walk back the suggestion. 

During Trump’s second term, Powell has stated that he hasn’t lowered interest rates to mitigate potential inflation from the president’s tariff policies. Trump again criticized Powell for his actions and floated the idea of firing him. 

Trump has recently signaled that Powell will likely be allowed to finish his term (which ends in May 2026). 

Why does Trump want to cut interest rates? 

Lower rates typically boost the stock market and make borrowing cheaper, which can help fuel short-term economic growth. 

Critics, like President Trump, argue that Powell is too conservative with his decisions on interest rates, potentially hurting the economy. 

Meanwhile, others argue that Powell has the right approach and that President Trump is focused on keeping the stock market running hot during his time in office, regardless of the long-term risks.

If Jerome Powell is fired, how would this impact Bitcoin’s price?

Legally, Powell can’t be fired without cause. However, Trump may find a legal workaround or install a more dovish replacement in 2026.

If a new Fed Chair were perceived as more willing to cut rates aggressively, that could boost Bitcoin’s price in the short term. As noted earlier, crypto markets often respond positively to lower interest rates as investors are more willing to put money into ‘riskier’ assets. 

However, any move that undermines the Fed’s credibility could have broader implications. Investors could lose confidence in U.S. institutions, which might lead to volatility across a range of different assets (including Bitcoin).

It’s possible that BTC could benefit from a loss of confidence in the dollar, as investors search for a safe haven for their wealth. 

In the past, just the rumor of Powell being fired was enough to spark a major selloff. In December 2018, the Russell 3000 index had one of its worst days of the Trump presidency after reports surfaced about Powell’s potential removal. Stocks quickly rebounded once it became clear he would stay.

In conclusion 

Jerome Powell may not be a Bitcoin evangelist, but he may be one of the most important people determining the price of the asset. His COVID-era stimulus policies helped fuel a historic bull run. 

President Trump’s relationship with Powell, and the broader direction of U.S. monetary policy, will remain an important factor for Bitcoin investors to watch.