Jerome Powell is a key figure in the global financial system, wielding significant influence over markets, including the cryptocurrency sector. His statements can trigger sharp movements in Bitcoin ($BTC), with swings of up to 20% within seconds. Powell also holds the power to impact crypto's future in the U.S., including whether the Federal Reserve might one day hold Bitcoin. Some even speculate he could play a role in ending crypto as we know it.
Powell’s influence was evident during a recent market drop, where his speech caused a 15% decline in a single day. This makes his story worth examining, especially as discussions arise about whether he might be replaced.
Powell’s Background and Stance on Crypto
Appointed by Donald Trump in 2018, Powell brought extensive experience in both finance and government, making him a well-regarded choice at the time. Although Trump wasn’t particularly pro-crypto during his presidency, Powell effectively fulfilled his duties as Fed Chair.
From the beginning of his tenure, Powell has approached cryptocurrency with caution. While he acknowledges the potential of blockchain technology, he frequently emphasizes the risks and volatility inherent in crypto markets. For example, in Congressional testimony, he underscored the need for regulatory oversight, a stance that became even firmer after the collapse of FTX.
Though Powell doesn’t openly oppose crypto, his speeches often coincide with market downturns. For instance, during the last FOMC meeting on November 7, the Fed announced a 25-basis-point rate cut. The market responded positively due to the lack of negative news. However, during a subsequent meeting, Powell stated that the Federal Reserve is not authorized to hold Bitcoin and has no plans to expand its reserves in the near future. This comment alone triggered a 7% drop in the market.
How Powell Could Shape Crypto’s Future
Looking ahead, Powell’s decisions will continue to influence crypto markets. Interest rate projections for 2025 already suggest fewer cuts, indicating a potentially volatile year for crypto in 2024. However, Powell remains optimistic about economic conditions improving in 2025.
Will Jerome Powell Be Replaced?
The likelihood of Powell being removed is slim. Although a president can dismiss a Fed Chair "for cause," such actions are rare to maintain the Federal Reserve's independence. While Trump criticized Powell in the past, he recently stated that he doesn’t plan to remove him before his term ends in 2026.
In conclusion, Jerome Powell remains a pivotal figure in the financial world, particularly for the crypto market. His cautious approach and impactful speeches make him a key player to watch as the sector evolves.
