Powell’s Successor: What a New Fed Chair Could Mean for Bitcoin and Crypto

With Federal Reserve Chairman Jerome Powell's term set to expire in May 2026, U.S President Donald Trump is expected to announce his successor by the end of 2025. This is extraordinary, as announcing his pick months before Powell’s term expires may create an effective ‘shadow’ Chair who would compete for influence.

For cryptocurrencies, this scenario presents both opportunities and risks. On one hand, a crypto-friendly nominee could begin shifting market expectations and regulatory approaches before officially taking office. On the other, the resulting confusion and potential damage to Fed independence could trigger broader market volatility that indiscriminately punishes risk assets, including Bitcoin.

Treasury Secretary Scott Bessent has now confirmed five finalists: current Federal Reserve Governors Christopher Waller and Michelle Bowman, former Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett and BlackRock executive Rick Rieder. 

The monetary policy stakes

The first concept to consider is that interest rate decisions are made by majority vote of the 12 member Federal Open Market Committee (FOMC), which includes the seven Federal Reserve Board Governors, the President of the New York Federal Reserve Bank, and four out of a total of 11 rotating regional Reserve Bank presidents. 

While all 19 Fed leaders participate in discussions, only 12 vote on policy at each meeting. The Chair's influence comes from leading these meetings and building consensus, not from unilateral power.

For context, the formal rule is that interest rate changes are decided by simple majority vote. If the vote is tied at 6-6, the Chair can use their procedural influence to break the deadlock, but in practice the committee almost never leaves a tie unresolved, with the Chair typically rephrasing the motion or modifying the proposed target rate change to bring at least one more member onboard.

In other words, the Chair has significant but not absolute power.

The relationship between Federal Reserve policy and cryptocurrency prices has become increasingly apparent over 2025. When Powell hinted in late October that the Fed's 25bps rate cut might be the last of 2025, this may have contributed to Bitcoin dropping from its record high to trade closer to $100,000, while Ethereum lost all its gains year-to-date.

This sensitivity also shows how dependent crypto markets have become on expectations of loose monetary policy. And historically, periods of lower interest rates and increased liquidity have fueled significant rallies in digital assets. 

During the 2020-21 zero-rate and quantitative easing period, abundant liquidity and a weaker U.S. dollar helped drive Bitcoin from under $10,000 to then record highs. Conversely, the Fed's aggressive tightening campaign in 2022 may have contributed to a broad risk asset selloff, sending Bitcoin tumbling alongside tech stocks.

Recent FOMC meetings have seen unprecedented dissents, including the first double dissent from Board Governors in over 30 years in July 2025, when Michelle Bowman and Christopher Waller both voted for rate cuts while the majority held steady. And in October 2025, the committee voted 10-2 to cut rates, with Stephen Miran preferring a larger half-point cut and Jeffrey Schmid preferring no cut at all. 

These dissents show that the new Chair will need to build consensus within a split committee. But it also means that the composition of the FOMC matters significantly. If Trump appoints a crypto-friendly Chair and dovish governors to fill recurring vacancies on the seven-member Board (which always votes), this could create a structurally more accommodative committee.

The candidates 

Each potential Powell successor brings their own brand of monetary philosophy to the table. As a reminder, Trump has in the past called Powell ‘stupid’ and a ‘total loser’ for the slow pace of rate cuts, so it may be  that the next Chair will be dovish.

1. Kevin Hassett 

Hasset leads the prediction markets due to his close relationship and longtime loyalty to President Trump. This could give him an edge, though a Chair so closely tied to the White House may damage the central bank's image of independence. For crypto, his appointment could signal a more politically influenced Fed willing to prioritize rate cuts, potentially boosting digital asset prices in the short term while raising concerns about institutional credibility.

2. Christopher Waller 

Waller has emerged as an influential voice within the Fed and dissented in favor of deeper rate cuts at recent meetings. Most significantly for the crypto industry, Waller has shown genuine enthusiasm for opening the Fed's payments systems to cryptocurrency-adjacent decentralized finance companies. As an existing Governor with established relationships across the FOMC, he would enter the Chair role with existing credibility and consensus-building experience. 

3. Kevin Warsh 

Warsh brings Wall Street credibility and a hawkish monetary history, having served as a governor during the 2008 financial crisis. He has traditionally favored keeping inflation contained and has criticized what he views as an overly expansive Fed, particularly in its bond-buying programs. While Warsh has recently called for rate cuts and criticized Powell's hesitancy, his historical hawkishness could come back in play if inflation concerns resurface.

4. Michelle Bowman

Bowman is currently the Fed's vice chair for supervision and represents an unconventional choice. She’s been willing to buck conventional wisdom inside the central bank, which may appeal to a president seeking wholesale reform of the institution. Her independent thinking could translate to novel approaches on digital asset regulation, though her specific views on crypto remain less defined than other candidates.

5. Rick Rieder

BlackRock's chief investment officer for global fixed income would bring extensive market experience and a dovish perspective. He recently argued that lower policy rates will have much more of a positive influence on the system than any adverse effects, while his institutional investment background could bridge traditional finance and digital assets, potentially accelerating mainstream adoption.

It’s worth considering the monetary environment the new chair will find themselves in. The Reserve intends to end its Quantitative Tightening program by December 2025, which has removed nearly $1 trillion in securities from the balance sheet since 2022 as part of efforts to fight inflation.

The end of this liquidity drain may see further inflows into risk assets, including Bitcoin. Historically (though past results are no guarantee of future returns), liquidity pivots from monetary contraction to neutrality have coincided with the start of significant Bitcoin and altcoin rallies. 

This combination of rate cuts and QT cessation could create ideal conditions for a crypto bull market.

Regulatory revolution

The Chair appointment coincides with a broader transformation in cryptocurrency regulation under the Trump administration. At the start of 2025, Trump signed an executive order establishing the administration's policy to support the responsible growth and use of digital assets, blockchain technology and related technologies across all sectors of the economy.

This pro-crypto shift continued in July when Congress passed the GENIUS Act, the first major federal cryptocurrency legislation. The law establishes a comprehensive regulatory framework for stablecoins, requiring 100% reserve backing with liquid assets and creating a dual federal-state chartering system. 

The new SEC leadership under Commissioner Paul Atkins has also taken a very different approach compared to the Biden administration's Gary Gensler, who was criticized for ‘regulation by enforcement.’ Atkins is expected to provide clear rules and guidance through the new Crypto 2.0 task force and participation in the Crypto Working Group.

And there’s the general institutional footprint, with spot Bitcoin ETFs enjoying massive inflows as blue chip companies continue to adopt digital asset treasury policies. The next Fed Chair will inherit an environment where traditional financial institutions are preparing to fully enter the crypto space, with their monetary policy decisions directly influencing the timing and scale of this institutional wave.

Of course, the central tension in Trump's Fed chair selection is between loyalty and independence. If markets perceive the new chair as less independent from the White House, they may have less confidence that the Fed will increase interest rates as necessary to keep inflation under control.

For crypto markets, this creates a paradox. While investors want loose monetary policy to fuel price appreciation, a Chair seen as compromised could trigger broader concerns about dollar stability and U.S. financial credibility, especially given the size of the country’s debt and deficit. 

Ironically, such concerns might initially benefit Bitcoin's narrative as an alternative to fiat currencies but could create too much macroeconomic instability for sustained bull market conditions.

What to watch

As the year-end announcement approaches, crypto investors should monitor several key factors:

• FOMC composition – Beyond the Chair, watch for Board Governor appointments and reappointments. A board stacked with Trump appointees could push policy in a more dovish direction regardless of who chairs the committee.
• Forward guidance signals – The true market impact will depend on whether the new Chair and FOMC majority signal an extended easing cycle or a more measured approach. Recent meetings with dissenting voices suggest the committee is prepared to disagree. 
• Regulatory co-ordination – How the new Chair coordinates with other agencies on crypto policy will matter as much as interest rate decisions. The Presidential Working Group on Digital Asset Markets is developing comprehensive regulatory frameworks that will shape the industry for years.
• Balance sheet policy – Beyond rate cuts, the pace and extent of balance sheet normalization will drive liquidity conditions. Any hints of renewed quantitative easing could be bullish for crypto.
• China trade relations – Ongoing tensions between the U.S. and China add uncertainty, as tariffs fuel inflation while also slowing economic growth. The new Fed chair's navigation of this tension will significantly impact risk asset sentiment.

Overall, the combination of a potentially more dovish Fed chair, the ending quantitative tightening, comprehensive regulatory frameworks and growing institutional adoption could create a powerful tailwind for digital assets through 2026.

However, crypto investors should remain cautious about celebrating too aggressively. If Trump's pick tilts too far toward political loyalty at the expense of economic competence, the resulting instability could overwhelm any benefits from looser monetary policy.

How to buy crypto in 5 steps

Looking to buy crypto online? We make it as simple as possible to start:

1. Choose a trusted crypto platform – select a reputable exchange like Crypto.com with strong security and positive customer reviews.
2. Create an account – sign up with your email, complete KYC verification, and set up two-factor authentication.
3. Deposit funds – add money using a bank transfer, debit/credit card, or other supported payment methods.
4. Purchase crypto – search for your preferred crypto on the platform and place a buy order.
5. Secure your crypto – either let us handle the storage or transfer your crypto to a personal wallet for peace of mind.

Important information: This is informational content sponsored by Crypto.com and should not be considered as investment advice. Trading cryptocurrencies carries risks, such as price volatility and market risks. Before deciding to trade cryptocurrencies, consider your risk appetite. If you use a non-custodial wallet, you are responsible for securely storing your seed phrase. Losing it may result in loss of access to your assets.