- Bitcoin’s next rally may depend less on September’s expected rate cut and more on who President Trump nominates to replace Jerome Powell as Fed chair.
- Analysts say a dovish successor could unlock greater retail participation and drive Bitcoin’s price higher in the months ahead.
Notably, at the time of press, BTC is swapping hands with $115,032.81. This market price is as a result of 0.17% decline in the past 24 hours.
Markets Eye September Rate Cuts
Bitcoin (BTC) recently surged to an all-time high of $124,128 before retreating about 6% to $115,150 at press time. Traders are watching closely as the Federal Reserve prepares for its September 17 policy meeting, where many expect the first rate cut of the year.
I have a high degree of confidence this cycle is not over because I am expecting changes in the Fed to bring on considerably more dovish monetary policy,
KrĂĽger wrote in an X post on Monday.
This would start to get priced in once Trump announces his nominee to replace Powell.
The Fed’s policies directly affect Bitcoin by shaping risk appetite in broader markets. Lower interest rates generally push investors toward riskier assets like cryptocurrencies, while tighter policy often weighs on digital assets.
Trump’s Search for a New Fed Chair
Powell’s term expires in May 2026, but Trump has made clear he wants new leadership at the central bank. Reports suggest the administration is considering 11 candidates, including Jefferies’ chief market strategist David Zervos, BlackRock’s global fixed income CIO Rick Rieder, and former Fed governor Larry Lindsey.
Some insiders believe Trump has already narrowed the list to three or four names and could announce a nominee sooner than expected. The choice is crucial: a chair favoring looser monetary policy could reinforce bullish momentum in Bitcoin and other risk assets.
Tense Relationship Between Trump and Powell
Trump’s clashes with Powell are well documented. Since taking office, the president has frequently criticized the Fed chair for being too slow to cut rates. On April 17, Trump said, “Powell’s termination cannot come fast enough!” Florida Senator Rick Scott echoed this sentiment, adding, “It’s time for new leadership at the Federal Reserve.”
With political pressure mounting, markets are preparing for a change in Fed direction that could align more closely with Trump’s push for pro-growth monetary policy.
Bitcoin’s Outlook Tied to Fed Decisions
Currently, 83.9% of market participants expect a rate cut in September, according to the CME FedWatch Tool. Beyond that, analysts believe a more dovish Fed chair could spark additional inflows into Bitcoin.
Coinbase Institutional’s global head of research, David Duong, recently noted that “significant retail capital” remains parked in money market funds. Easier Fed policy, he argued, could “unlock greater retail participation in the medium term,” potentially sending Bitcoin higher.
For now, Bitcoin’s future hinges not just on upcoming rate cuts but also on Trump’s pivotal decision regarding Powell’s replacement. As Krüger suggests, the true pricing in of a dovish Fed may only begin once the nominee is revealed, a moment that could set the tone for Bitcoin’s next major rally.
