Trump’s Fed Chair Pick Sparks Crypto Market Optimism

Donald Trump’s Oval Office remarks have sent real-money prediction markets into a frenzy, with the President telling reporters he “already” knows who should succeed current Federal Reserve Chair Jerome Powell. Trump’s pointed criticism of Powell – “I would love to get the guy currently in there out right now, but people are holding me back” – combined with his suggestion that he might go the “politically correct” route with a standard nominee, triggered immediate market reactions.

On prediction platforms Polymarket and Kalshi, contracts tracking “Who will Trump nominate as Fed Chair?” quickly converged around Kevin Hassett, with odds surging to the mid-40s to high-40s percent range. Kalshi’s official social media account highlighted the dramatic move, posting: “BREAKING: Trump thinks he ‘already knows’ who will be next Fed Chair. 47% chance it’s Kevin Hassett.” Market analyst Jim Bianco captured the sentiment shift, writing: “He wants Bessent but will take Hassett. The rest get to take selfies in the Oval Office,” and later noting that “Hassett is separating himself from the pack and is on the verge of being the first person to trade over 50%.”

For macro-oriented cryptocurrency traders, the policy implications embedded in these probability shifts represent a potentially significant development. Kevin Hassett is widely perceived as more dovish than Jerome Powell and more aligned with Trump’s preference for easier financial conditions. Trader CRG (@MacroCRG) framed the moment as the arrival of a “New hand picked super dove as Fed chair coming soon,” capturing the market’s optimistic interpretation.

Macro and crypto analyst Alex Krüger identified the Fed-chair race as the real medium-term driver for risk assets once current Federal Open Market Committee noise subsides. “Here’s the next macro catalyst after the FOMC. A bullish catalyst the market is paying no heed to atm,” he wrote, adding that “the most bullish choices would be Hassett (likely), Rieder (possibly) and Zervos (unlikely).” The reasoning is straightforward: cryptocurrency assets trade as high-beta, liquidity-sensitive risk instruments, meaning they benefit disproportionately from accommodative monetary policy.

A Federal Reserve chair perceived as more willing to cut interest rates faster, tolerate easier financial conditions, or respond aggressively to equity market weakness represents a structural tailwind for the long-run liquidity environment that underpins speculative flows into Bitcoin and other digital assets. The pseudonymous trader Byzantine General outlined a potential Q2 2025 scenario featuring “a FED chair that listens to Trump” and “tariff dividends for plebs,” while cautioning that “you never know with Trump of course, but man, there could be something cooking.”

Beyond the immediate policy implications, Trump’s open pressure on Powell and his readiness to discuss replacing the Fed chair in overtly political terms reinforces another core cryptocurrency thesis. The more investors worry about the politicization of U.S. monetary policy and the erosion of central bank independence, the more compelling the “Bitcoin as hedge against political and institutional risk” narrative becomes for a growing subset of asset allocators.

This development occurs against the backdrop of a $3.11 trillion total cryptocurrency market capitalization, demonstrating the substantial stakes involved. While Jerome Powell remains in office and no official changes have occurred at the Federal Reserve, the shifting probability distributions on prediction markets toward Kevin Hassett are already being treated by crypto traders as a latent, potentially significant bullish tailwind building in the background.

The timeline remains crucial, with Powell’s term ending in May next year, creating a natural transition point that aligns with Trump’s comments. As prediction markets continue to price in the likelihood of a more dovish Fed chair appointment, cryptocurrency markets appear poised to benefit from both the prospect of easier financial conditions and the reinforcing narrative of Bitcoin as a hedge against institutional uncertainty.