Senator Elizabeth Warren has raised serious concerns about the future of both traditional markets and the crypto industry. In a recent interview, she warned that the stock market could crash if President Donald Trump removes Federal Reserve Chair Jerome Powell. But beyond that, it could also cause trouble for Bitcoin and the broader digital currency industry.
Fed’s Independence Matters: Even for Crypto
Warren, who serves on the Senate Banking Committee, said the strength of the markets relies heavily on the Federal Reserve’s independence. If Trump fires Powell, it would depict that the Fed is being controlled by politics. It could impact the confidence of investors, resulting in panic selling not only stocks but might also impact digital currencies like Bitcoin.
The crypto market may not seem tied to traditional finance, but it often reacts in similar ways. According to IntoTheBlock, Bitcoin’s price has a 0.63 correlation with the S&P 500. This means when the stock market moves, Bitcoin often moves in the same direction.
Could Bitcoin Crash Too?
BTC has traditionally been viewed as a “safe haven” asset, namely in the period of uncertainty in the market. However, in recent years, it has begun to behave like tech stocks. Whales (large investors), institutions, and hedge funds are highly interested in the crypto space. As a result, political shifts and fiscal policies, for instance who controls the Fed, have started to influence the crypto space more directly.
If Trump eventually fires Powell, it could be a strong bearish message throughout all markets. Traders may anticipate further political meddling in economic policy, and they could experience aggressive sell-offs in stocks and cryptocurrency alike.
Why Some Remain Bullish About Crypto
There are still a number of reasons to be optimistic about the future of BTC and the industry as a whole, despite Warren’s warning.
To one, Trump also recently suggested bringing an end to the U.S.–China trade war. It would stabilize the global markets and provide more stability to investors across the board, including crypto.
And in addition, there is continued pressure for peace with the Russia-Ukraine conflict. If that progress is made there, it may help buy traditional and digital assets markets by alleviating global tension.
Technically, some cryptocurrency analysts expect that Bitcoin has already reached its bottom. The Titan of Crypto, a well-liked market commentator, noted that Bitcoin is currently holding up on a critical support level. According to his charts, BTC should bounce back any moment now and target the $100,000 level.
Final Thoughts
Warning by Elizabeth Warren may not be the actual scenario, but it is a sign of how politics can influence the crypto industry too. If Trump takes action against Powell, it could shake both the digital currency market and Wall Street.
Still, with hopeful signs like trade talks and peace efforts, many in the industry are staying cautiously optimistic.
Investors will be watching closely — because in today’s world, what happens in Washington doesn’t stay in Washington. It echoes across the blockchain too.