Bitcoin Hits $120,000 as Fed Chair Powell Faces Increasing Political Pressure
Bitcoin surged past the $120,000 mark over the weekend, coinciding with mounting calls for a change in leadership at the U.S. Federal Reserve. Market observers are closely watching developments in Washington, where the Trump administration appears to be intensifying efforts to replace Fed Chairman Jerome Powell.
https://www.cnbc.com/2025/07/13/trump-can-fire-powell-if-theres-cause-hassett.html
Why Is the White House Targeting Powell?
The controversy centers around the Federal Reserve’s $2.5 billion renovation project, which is now under scrutiny from both political leaders and federal budget offices. Critics claim the scale and cost of the renovation are excessive and allege that Powell may have misled Congress in earlier testimony.
This controversy has fueled speculation that President Trump is preparing to remove Powell from his position and install a new chair more aligned with his economic policies.
Two key figures — former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett — have emerged as top contenders to succeed Powell, should the administration push forward with a leadership change.
Bitcoin and Crypto Assets Rally on Hopes of Dovish Fed Policy
Crypto markets historically react positively to signals of easier monetary policy. With Powell’s removal potentially paving the way for a more accommodative stance, traders are betting on continued growth in digital assets.
Bitcoin’s recent breakout above $120,000 is viewed as a direct response to political developments and the prospect of future interest rate cuts. All things being equal, lower interest rates tend to weaken the U.S. dollar, thereby boosting demand for risk-on assets like cryptocurrencies.
This is not the first time monetary policy expectations have played a role in crypto market movements. However, the current circumstances are unique due to the intersection of political pressure, inflationary trends, and a surging crypto adoption cycle.
Potential Impact on Crypto Regulation
Beyond monetary policy, a new Fed chair could shift the tone on crypto regulation. Although Powell has maintained a mostly neutral stance on digital assets, he has frequently emphasized the need for tighter regulation on stablecoins and risks to financial stability.
The crypto community sees a potential leadership change as a path to a more favorable regulatory environment — particularly if the new leadership adopts a more innovation-friendly posture toward blockchain technologies.
Market Outlook
As uncertainty builds around Fed leadership, crypto investors remain cautiously optimistic. The possibility of a pro-crypto Fed chair combined with lower interest rates is creating a tailwind for the entire digital asset market.
If the administration succeeds in replacing Powell, the crypto market could see even greater inflows and bullish momentum heading into the next financial quarter.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.