Bitcoin (BTC) was treading water slightly below $85,000 late Thursday as tensions between U.S. President Donald Trump and Federal Reserve Chair Jerome Powell added one other layer of uncertainty for buyers.
Markets dipped on Wednesday after hawkish feedback from Powell, who criticized Trump’s tariffs coverage, saying that it will possible lead to a slowing economic system and rising costs — what economists name “stagflation.” In his remarks, Powell made clear his larger focus for now would be on prices, suggesting tighter Fed policy than otherwise thought.
Trump — who nominated the former investment banker and lawyer as Fed chair during his first term (Powell was given a second four-year term by President Biden) — has expressed his displeasure with Powell since retaking the White House. Powell, though, who is set to remain atop the central bank until May 2026, has repeatedly stated his determination to finish his term and suggested the president has no standing to fire him.
On Thursday, the WSJ reported that Trump has been privately discussing firing Powell for months, according to people familiar with the matter. Former Fed Governor Kevin Warsh is reportedly waiting in the wings as Powell’s replacement, but Warsh has lobbied the president not to move against the Fed chair, according to the story.
Joining Warsh in that warning is Treasury Secretary Scott Bessent, who said the move could roil already shaky U.S. markets as the central bank is supposed to be independent from political influences.
Odds of Trump removing Powell this year on the blockchain-based prediction market Polymarket rose to 19%, the highest reading since the contract’s late January launch.
Trump’s comments came on the back of the European Central Bank (ECB) cutting key interest rates for the seventh consecutive occasion on Thursday as it warned of a deteriorating growth outlook.
More pressure on markets came from the latest Philadelphia Fed manufacturing index, published Thursday morning, which showed a nosedive in activity this month, sinking to its lowest level (-26.4) in two years. Meanwhile, the prices paid index climbed to its highest reading since July 2022, adding to concerns about the Trump administration’s large-scale tariff policy pushing the U.S. economy into stagflation.
The S&P 500 and tech-heavy Nasdaq stock indexes traded mostly flat during the day.
A look at the crypto market showed BTC and Ethereum’s ETH up 0.8% over the past 24 hours. Most assets in the CoinDesk 20 Index traded higher during the day, with bitcoin cash (BCH), NEAR and AAVE leading gains.
How bitcoin merchants place amid heightened worry on Wall Road ?
Bitcoin has stabilized between $83k and $86k with merchants chasing bullish bets whereas nonetheless looking for draw back safety.
On Deribit, merchants are actively chasing calls on the 90k to $100k strikes expiring in Could and June, the trade mentioned in a market replace Thursday. The demand for calls signifies expectations for a continued value rally.
A few of these bullish bets have been funded by premiums collected by promoting put choices.
On the similar time, there was renewed curiosity in shopping for put choices at $80k expiring this month, representing preparations for potential value declines. Shopping for a put choice is akin to buying insurance coverage towards value slides.
The varied two-way movement comes because the VIX, Wall Road’s worry gauge measuring the 30-day implied volatility, nonetheless stays nicely above its 50-day common, regardless of the pullback from current highs above 50.
The VIX is warning that the macro scenario continues to be unraveling fairly than resolving, the trade mentioned on X.
