Trump-Powell Standoff: Why Crypto Could Be the Real Winner
- Powell warns Trumps tariffs could cause stagflation, sparking social media debate on cryptos safe-haven potential.
- Trump retaliates against Powells criticism, hinting at his removal after Fed rate cut warnings.
- Despite uncertainty, Bitcoin rebounds above $85K as decoupling hopes rise amid traditional market concerns.
Tensions rise between US President and Fed Chair Jerome Powell after the latter warned of an impending stagflation due to the tariff policies. Amidst this, social media discussions heated up on the possible implication of tariffs on the crypto market and whether the uncertainty in the traditional market pushed investors towards crypto assets.
Continuing its retaliation tactics, the US administration under Trump announced an additional 145%+ tariffs on China, triggering shockwaves across financial markets. Powell has become increasingly critical of Trump, calling his tariff policies excessive and saying they could make it difficult for the Fed to keep inflation low and support job growth.
Trump hit back, claiming that the Fed should have already cut rates (a typical practice during emergency reasons), and blamed Powell for being slow to react, even as other central banks such as the ECB have cut down rates to assist in economic recovery. However, Powell cautioned that Trumps newly imposed tariffs, particularly the 145%+ levels on China, could lead to a dangerous economic mix of rising prices and slowing growth, a phenomenon known as stagflation.
The clash escalated when Powell asserted the Feds independence and the legal protections around his role. Trump immediately took to social media, called him Too Late Jerome, and hinted at his termination.
Trump: Bitcoin Surges Past $85K Despite Market Correlation Concerns
Despite ongoing uncertainty, US stocks and crypto assets have bounced back. Bitcoin, in particular, surged above $85K, although the current correlation between BTC and US equities remains high.
But there is a growing belief that crypto could eventually decouple if distrust in traditional monetary policy rises. Looking at the past trends, the biggest and most robust bull runs occurred when there was zero correlation between the two sectors.
Considering the latest turn of events, two scenarios seem plausible. If Trump removes Powell or forces the Fed to bow to political pressure, crypto may be seen as a safe haven for investors turning away from centralized institutions. Despite ongoing tariffs and failed rate cut hopes, the crowds market sentiment remains higher than average.
Perhaps this is due to the +10% price bounce from BTC over the past 10 days, and the crowd is purely reacting to the latest price movements. But the narratives are still painting a picture that traders from around the world are at the whim of what the US President decides to do or say next.
Read more: https://www.tronweekly.com/trump-crypto-real-winner/
Text source: TronWeekly
