Bitcoin (BTC) remained teetering below $85,000 late Thursday as the ongoing tensions between U.S. President Donald Trump and Federal Reserve Chair Jerome Powell raised further uncertainties for investors.
Markets saw a downturn on Wednesday following hawkish remarks from Powell, who criticized Trump’s tariff policies, predicting they could result in a sluggish economy and rising prices—a situation referred to as “stagflation.” Powell emphasized his primary concern would be price stability, hinting at a tighter monetary policy than previously anticipated.
What to know:
- Bitcoin hovered around $85K, with the CoinDesk 20 Index boosted by gains from BCH, NEAR, and AAVE.
- Reports indicate Trump has privately considered firing Powell, raising alarm about market stability and the independence of the central bank.
- Traders for Bitcoin options are leaning toward bullish bets, aiming for $90K to $100K, but are also looking for safeguards against short-term dips, according to Deribit data.
On Thursday, the Wall Street Journal (WSJ) reported that Trump had been contemplating firing Powell for several months.
Former Fed Governor Kevin Warsh has cautioned against such a move, while Treasury Secretary Scott Bessent also warned it could destabilize the already fragile U.S. markets.
The anticipation of Trump altering Powell led to a rise in predictions that he might remove the chair this year, with odds climbing to 19% on the blockchain-based prediction market Polymarket. Trump’s remarks coincided with the European Central Bank (ECB) reducing key interest rates for the seventh consecutive time amidst warnings of a deteriorating economic outlook.
Recent data from the Philadelphia Fed manufacturing index indicated a significant drop in activity, hitting a two-year low that compounded fears regarding economic stagnation due to the Trump administration’s tariff strategies. The S&P 500 and tech-heavy Nasdaq indexes showed little movement throughout the day.
A brief observation of the crypto market reveals that Bitcoin and Ethereum (ETH) both experienced a moderate uptick of about 0.8% over the last 24 hours, with most assets within the CoinDesk 20 Index reporting gains, particularly BCH, NEAR, and AAVE.
How are Bitcoin traders adapting amidst growing anxiety on Wall Street? With Bitcoin stabilizing between $83K and $86K, traders are chasing bullish options while simultaneously seeking protection against downturns.
