The stability of U.S. monetary policy is once again under scrutiny, and this time it’s sending ripples through the crypto world.
Crypto investor and entrepreneur Anthony Pompliano has cautioned that former President Donald Trump’s threats to remove Federal Reserve Chair Jerome Powell could trigger severe market instability - posing a significant risk to Bitcoin and the broader crypto ecosystem.
Trump’s recent social media post, declaring that “Powell’s termination cannot come fast enough,” has reignited concerns about political interference in the Fed’s independence. Trump criticized Powell for delaying rate cuts, calling him “Too Late Jerome” and suggesting that his reluctance to lower interest rates is damaging the economy.
Pompliano responded strongly to the post, warning in a video on X (formerly Twitter) that firing Powell over a policy disagreement would set a dangerous precedent. “That’s not the area we want to go into,” he said, emphasizing the need for stability and institutional independence in monetary governance.
Historically, Bitcoin has responded positively to rate cuts and increased market liquidity. However, Pompliano noted that abrupt, politically motivated changes at the Fed - especially in times of economic fragility - could send shockwaves through financial markets.
He warned that undermining the Fed’s authority would not only damage investor confidence but could also create short-term chaos in Bitcoin and other crypto markets.
“If the Fed becomes a political tool,” Pompliano explained, “it’s no longer a neutral referee - it’s a weapon. And markets, especially risk assets like Bitcoin, don’t react well to that kind of uncertainty.”
Pompliano isn’t alone in raising concerns. Senator Elizabeth Warren also spoke out against the idea of removing Powell, cautioning that it could “shake investor confidence” and potentially trigger a broader financial downturn.
Meanwhile, Powell himself recently acknowledged the growing role of digital assets. Speaking at an April 16 event in Chicago, the Fed Chair called for a clearer legal framework for stablecoins - signaling the central bank’s increasing focus on the crypto sector.
Although Pompliano has been a vocal critic of the Fed’s politicization, he argued that retaliatory actions - like firing Powell - only worsen the situation. “Two wrongs don’t make a right,” he said. “The answer to a politicized Fed is not to politicize it even further.”
The larger implication for crypto investors is clear: the future of Bitcoin may hinge not just on rates and regulation, but also on how independent institutions like the Fed can remain in the face of political pressure. Any disruption to that balance could tip the scales in unexpected and volatile ways.
As the 2024 U.S. presidential election heats up, crypto markets will be watching not just for policy signals - but for signs of institutional stability or strain.