On Tuesday, Bitcoin and several crypto-related stocks weakened toward $75,000. This decline was driven by market sentiment regarding the central bank’s independence due to pressure to lower interest rates from President Trump, as well as growing concerns over peace talks between Iran and the U.S. that have yet to reach a resolution while the ceasefire deadline is approaching soon.
During the senate confirmation hearing of the Federal Reserve chair nominee, Kevin Warsh emphasized that the Federal Reserve remains independent despite pressure from President Trump. This statement was made to dismiss public speculation about political pressure on interest rate decisions following the halted Iran talks.
In response, BTC, which was previously trading around $77,000, dropped to near $75,000 before eventually rising again to $75,700, about 0.9% lower over the past 24 hours. Meanwhile, the Nasdaq and S&P 500 both fell by 0.1% to 0.2% in the afternoon session. This was followed by several crypto-related stocks, such as exchange Coinbase (COIN), which fell more than 6%, Robinhood (HOOD) down 4.5%, Galaxy (GLXY) down 5.5%, while stablecoin issuer Circle (CRCL) plunged 8.3%.
During the Senate Banking Committee hearing session, the Fed chair nominee, Warsh, also stated that he had never agreed to any request from President Trump regarding where interest rates should be set and had never even considered doing so due to political demands. Meanwhile, President Trump has repeatedly publicly called for lower interest rates and put pressure on the current Fed Chair Jerome Powell, thereby raising concerns about the central bank’s independence.
President Trump has also exerted similar pressure on Warsh by continuously pushing for interest rate cuts. As in a CNBC interview, President Trump stated that he would be disappointed if Warsh did not immediately lower interest rates.
Although Warsh’s statements suggest that he does not feel pressured to cut interest rates, there is still a possibility that Warsh will lower interest rates. This possibility was stated by Matt Mena, a senior crypto research strategist at asset manager 21Shares. He added that Kevin Warsh could also have a positive impact on crypto policy, considering that he would become the first Fed chair with deep ties to the digital asset industry. In addition to having invested in dozens of crypto projects, Warsh also views bitcoin as the “new gold” for the younger generation.
