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Bitcoin stayed strong on Friday, trading at about $106,950. The cryptocurrency market was worried about the possibility of a change in leadership at the Federal Reserve.
There are reports that Donald Trump, the President of the United States, is thinking about replacing Jerome Powell as head of the Federal Reserve before Powell’s tenure ends in 2026. This kind of action might change the central bank’s monetary policy, especially when it comes to interest rates and liquidity.
This would have an effect on both traditional and crypto markets. Investors are keeping a close eye on this change since a more dovish Fed might help risky assets like Bitcoin and Ethereum.
The Fed’s Speculation Affects Markets
This cautious optimism was based on the larger financial markets. The Dow Jones Industrial Average rose more than 300 points in the middle of the week, thanks to robust tech stock performance and falling Treasury yields.
The S&P 500 and Nasdaq also went up, which shows that people are becoming more sure that the Fed might stop raising rates. This positive feeling in stocks spread to cryptocurrencies, which generally follow risk-on trends.
Bitcoin hit a daily high of $107,250 before dropping a little, as Ethereum and other big altcoins made little gains.
TradingView says that the entire market valuation of all cryptocurrencies is $3.24 trillion, which shows that they are still strong despite the uncertainty.
It’s not the first time that reports have said Trump wants to replace Powell. He has been critical of the Fed chair’s policies for a long time, saying that high interest rates slow down economic growth.
There are reports that Trump has been talking to advisors about possible successors, but no official names have come up yet.
Traders are changing their plans because they think the Fed will be more flexible and support lower rates and greater liquidity.
The U.S. dollar is at a three-year low, and bond yields are falling. This makes people think that monetary conditions could get looser, which has historically been good for cryptocurrencies.
Bitcoin’s Careful Reaction
Bitcoin’s price movement on Friday showed that the market was in wait-and-see mode. The leading cryptocurrency traded between $106,200 and $107,300, showing steadiness but not a big breakout.
This measured response shows how unclear the future of the Fed is. A dovish policy shift might push capital toward riskier assets, but the political and procedural problems with replacing Powell make them less hopeful. Crypto investors are being prudent while they wait for clearer signals from Washington since they are used to dealing with changes in the economy as a whole.
Bitcoin is very sensitive to changes in monetary policy since it is a way to protect against the value of fiat money going down. Bitcoin prices have gone up in the past when the currency was weak or interest rates were low. This is because investors were looking for other options to traditional assets. The situation, on the other hand, is still complicated. The crypto markets have been hurt by tighter monetary conditions over the past year, but any sign of easing might bring back interest. Still, the market is on edge because there hasn’t been a verified change in Fed leadership, and traders are cautious to completely commit to positive wagers.
More general market trends
The way stocks and cryptocurrencies interact with each other shows how the market as a whole works. The recent rise in the stock market, which was led by tech-heavy indexes, has made things better for crypto, but the uncertainty about the Fed makes things more cautious. Investors are also keeping an eye on possible legislative changes that could affect the crypto ecosystem because of regulatory uncertainties in the U.S. The market is still in a fragile state right now, but Bitcoin’s stable trading range shows that it is ready to react to the next big event.
In the Future
As talks in Washington go on, the crypto market could become unstable. Powell is still in charge, and there hasn’t been an official announcement about who will take over, but the idea of a shift in leadership is already affecting people’s feelings. People who invest in cryptocurrencies are quite aware of macroeconomic signals and are keeping a careful eye on any changes that could make a difference. There will be big effects for Bitcoin and the market as a whole, no matter what happens with the incoming Fed head. Right now, the market is holding its breath, hoping for a better climate but also dealing with the fact that politics are up in the air.
