Bitcoin Rallies Past $120,000 as Fed Chair Faces Growing Political Pressure
Bitcoin soared above $120,000 for the first time over the weekend, amid intensifying calls from the White House to replace Federal Reserve Chair Jerome Powell—a development that could reshape U.S. monetary policy and the regulatory environment for crypto.
Political Heat on Powell
President Donald Trump and his allies have increased criticism of Powell since the 2024 election. While Powell aggressively cut rates ahead of the vote, he adopted a more hawkish stance afterward, frustrating Trump, who has long demanded lower borrowing costs.
“Frankly, it’s about breaking some heads,” former Fed Governor Kevin Warsh told Fox News on Sunday. Warsh, considered a leading candidate to replace Powell, pointed to the central bank’s controversial $2.5 billion renovation project as an example of the Fed losing its way, and said it’s time for “regime change.”
Meanwhile, Kevin Hassett, National Economic Council Director and another potential Powell successor, confirmed that the White House is reviewing whether the president has authority to remove the Fed Chair. “It’s being looked into… but certainly if there’s cause, he does,” Hassett said.
Renovation Costs Under Fire
Central to the scrutiny is the Fed’s costly renovation, which has drawn questions from OMB Director Russ Vought about potential overspending and Powell’s prior testimony to Congress. In response, the Fed launched a new FAQ page over the weekend to clarify its spending decisions.
Trump also weighed in, slamming Powell and the renovation costs:
“Jerome Powell has been very bad for our country. We should have the lowest interest rate on Earth, and we don’t. He just refuses to do it,” Trump said, also blaming the construction project’s origins on President Biden’s administration.
Crypto Stakes Rise
Beyond interest rates, crypto markets are closely watching for regulatory changes if Powell departs. Powell has historically described bitcoin as a competitor to gold rather than the U.S. dollar, emphasizing its role as an investment rather than a payments tool.
However, he has consistently called for clearer regulation around stablecoins and has voiced concerns about risks to financial stability and “debanking” practices that pressure banks to avoid crypto firms.
A change in leadership could signal a new regulatory approach—one potentially more favorable to the crypto sector.
The Big Picture
Bitcoin’s record-breaking rally underscores how sensitive crypto markets remain to shifts in U.S. monetary policy and political developments. As speculation grows over Powell’s future, traders are weighing how a new Fed chair might influence interest rates—and whether the next leader could pave the way for a friendlier environment for digital assets.
