President Trump has announced his intention to replace Federal Reserve Chair Jerome Powell amid an ongoing Department of Justice ethics investigation, sparking significant attention in Washington as of January 2026. This political shakeup could impact financial policy, potentially affecting cryptocurrencies like Bitcoin, which saw notable price increases following the announcement, reflecting market volatility and investor sentiment shifts.
The Department of Justice (DOJ) launched an investigation into Federal Reserve Chair Jerome Powell. This comes amidst President Trump's announced plans to replace Powell, as he criticizes Powell's interest rate policies. Trump's pledge on social media to replace Powell quickly amidst DOJ's actions highlights a focus on stimulating economic policies that could affect cryptocurrency markets.
Crypto Market Response to Powell Replacement News
The announcement has sparked mixed reactions. Key crypto figures expressed optimism for a potential surge in digital currencies like Bitcoin. A dovish Federal Reserve policy is anticipated should Powell's successor implement rate cuts.
In parallel, Bitcoin's price rose by 3.2% within 24 hours as markets speculated a pro-stimulus shift at the Fed. Similarly, Ethereum and Solana also saw gains according to data from major exchanges.
2019 Trump-Powell Clash Echoes in Current Scenario
Comparisons have been made to past instances where Trump criticized Powell, such as tweets from 2019. Back then, Bitcoin saw short-term dips before rallying on expectations of Fed easing.
Experts speculate that the DOJ investigation might intensify debates around Fed independence. Arthur Hayes remarked that this could serve as a "risk-on paradise" for cryptocurrencies, suggesting a trend towards decentralization.