Trump's Plan To Blow Up Bitcoin

Jerome Powell’s term expires in May 2026, and Donald Trump has already announced that he is considering four candidates to replace him and drastically lower interest rates. This crucial decision could radically transform monetary policy and create shockwaves in global financial markets. Get ready for a bull run in the coming months!

Trump Disrupts Fed Schedule to Lower Interest Rates

Trump’s early announcement marks a break with usual practices. According to Polymarket data, there is only a 37% chance that no successor will be announced before December. This unusual strategy is already turning Powell into a scapegoat whose decisions are increasingly losing credibility.

Each statement by Trump on Truth Social causes immediate fluctuations in the odds of various candidates. This unprecedented situation allows investors to anticipate future monetary policy directions several months in advance.

Consequently, traders are already incorporating each candidate’s positions into their strategies. This anticipation creates increased volatility in bond markets, the dollar, and risky assets like bitcoin.

Christopher Waller, the Favorite Who Wants to Lower Interest Rates

Christopher Waller, Fed governor since 2020, currently leads the polls on Kalshi. His speech last December particularly caught attention. By advocating for rate cuts despite tariff risks, he caused a spectacular 20 basis point drop in the 2-year Treasury yield in just 15 minutes.

This immediate reaction illustrates Waller’s already significant influence. Analysts now call him Trump’s “shadow Fed chair”, suggesting he is already guiding market expectations while Powell still holds the official position.

His monetary philosophy prioritizes growth and employment over temporary inflationary pressures. Waller believes supply shocks, notably tariffs, fade faster than expected in inflation data. This pragmatic approach reassures markets about his ability to maintain an accommodative policy.

For bitcoin, a Waller presidency would mean lower interest rates and a weaker dollar. Historically, these conditions favor risky assets and strengthen bitcoin’s appeal as an alternative store of value.

Kevin Walsh, the Hawk Who Could Surprise the Markets

Kevin Walsh represents the opposite of Waller in this race. A former Fed governor from 2006 to 2011 and ex-Morgan Stanley banker, he adopts a firmly conservative stance. He sharply criticizes the current Fed, accusing it of overstepping its mandate by supporting lax fiscal policy.

Walsh advocates a strict approach: no interest rate cuts as long as inflation does not sustainably return to the 2% target. This stance sharply contrasts current market expectations and Trump’s wishes for lower rates.

Paradoxically, Walsh’s statements provoke fewer reactions than Waller’s. This difference is explained by his outsider status, unlike Waller who already sits on the governors’ board. Nevertheless, a Walsh appointment would trigger a sharp repricing of expectations.

The consequences would be dramatic for bitcoin. High real interest rates and a strengthened dollar would weigh heavily on digital gold. Walsh thus represents the worst-case scenario for crypto investors, who would then face high financing costs until 2026.

The Architects of a Pro-Quantitative Easing Policy

Scott Bessent already holds a strategic position as Treasury Secretary. In a recent Fox Business interview, he dodged direct questions about his interest in the Fed chairmanship, stating he already has “the best job in Washington.” However, his positions suggest a perfect synergy between Treasury and Fed under his leadership.

Bessent bets on an aggressive liquidity strategy. By favoring the issuance of short-term Treasury bills rather than long bonds, he keeps long-term rates artificially low. This “Treasury put” complements a dovish monetary policy and creates an environment of massive liquidity.

Kevin Hassett, director of the National Economic Council, shares this expansionist vision. He believes there is “no reason” not to cut rates immediately. Hassett combines fiscal stimulus and accommodative monetary policy to maximize growth.

An appointment of Bessent or Hassett would trigger a market euphoria. This ultra-accommodative Treasury-Fed combination would create ideal conditions for a surge in risky assets, with bitcoin leading.

The Impact of Lower Interest Rates on Bitcoin?

Bitcoin reacts especially to monetary policy expectations. Negative real interest rates and dollar depreciation are traditionally its best catalysts. Conversely, a restrictive policy erodes its appeal compared to interest-bearing assets.

The Waller/Bessent/Hassett scenario would propel bitcoin to new highs. These accommodative candidates would create an environment of cheap financing and abundant liquidity. Moreover, their statements already provoke immediate market reactions, offering significant trading opportunities.

On the other hand, Walsh directly threatens bitcoin’s bullish thesis. His conservative views would strengthen competition from traditional gold and Treasury bonds against digital gold. Institutional investors would then favor guaranteed yields over speculative assets.

The choice of the next Fed chair will extend far beyond U.S. borders. This appointment will influence global monetary policies and redefine the balance between the dollar, euro, and yuan. European and Asian central banks will need to adjust their strategies accordingly, creating major arbitrage opportunities for savvy investors, for example by establishing a strategic bitcoin reserve.