Trump firing Fed Chair Powell could trigger ‘Nixon shock,’ warns analyst
Trump firing Fed Chair Powell could trigger ‘Nixon shock,’ warns analyst originally appeared on TheStreet.
Bitcoin passed $120,000 this week, surpassing the market capitalization of Amazon, making Bitcoin’s market cap the fifth largest in the world.
At the same time, nearly $4 billion has flown into crypto investment products, and altcoins have picked up momentum.
But this turn is not just technical. It is becoming even more tied to macro signals with the whispers of where the future of Federal Reserve Chair Jerome Powell may end up.
CPI data comes out on Tuesday, and President Trump continues to mention a possible interest rate cut by the Fed, forcing investors to adjust expectations.
However, a wild card has surfaced!
President Donald Trump may remove Federal Reserve Chair Jerome Powell, a trade that Deutsche Bank strategist George Saravelos states is one of the most underpriced risks in the markets. According to Saravelos, if Jerome Powell is fired, the market could be disrupted within 24 hours.
As per WSJ, Saravelos told clients in a note that dismissing Powell could lead to a 3%–4% fall in the dollar and push U.S. Treasury yields up 30–40 bps in a matter of hours.
The ramifications would stretch well beyond U.S. borders, he said, noting the threat to swap lines and overall market confidence in U.S. monetary policy.
‘Boon to Bitcoin’
In crypto circles, analysts spoke exclusively to TheStreet Roundtable. They said such a move would further amplify the asset class’s core narrative.
“Removing the Fed Chair would be a nuclear event for market confidence,” said Mike Cahill, CEO of Douro Labs. ‘Crypto thrives when people stop believing the old guard has things under control.”
According to Greg Magadini, Director of Derivatives at Amberdata, Trump’s advocacy for lower rates, especially as the U.S. is trying to manage debt costs, could be disastrous if long-term yields rise due to a loss of faith in the independence of the Fed.
However, Magadini believes that “It would be a huge boon to Bitcoin, gold, and other hard assets—a disaster for fixed income and the dollar.” He compared it to Nixon’s decision to go off the gold standard in 1971.
President Richard Nixon’s 1971 decision to devalue the dollar and unpeg it from gold caused global financial turmoil and a gold price boom, commonly known as the ‘Nixon shock’.
As markets prepare for Tuesday’s inflation data, Bitcoin’s current price is more than just ETF inflows as analysts are betting on a much larger macro dislocation.
Whichever way Powell decides to go, markets are already pricing in a change. At press time Bitcoin is trading at $119,803.91, up nearly 1% in the last 24 hours, as per Kraken’s price page.
Trump firing Fed Chair Powell could trigger ‘Nixon shock,’ warns analyst first appeared on TheStreet on Jul 14, 2025
This story was originally reported by TheStreet on Jul 14, 2025, where it first appeared.
