Financial Conflict Emerges Between Trump and Powell Regarding Bitcoin Regulation
In the dynamic world of cryptocurrency, the impact of central bankers' statements and macroeconomic data on Bitcoin's price and market trends has become increasingly significant in 2025.
Historical data from 2020 to 2025 shows that interest rate decisions by the Federal Reserve, particularly rate cuts, have a key role in shaping Bitcoin's price. For instance, a 1% rate cut tends to boost Bitcoin prices by approximately 13–21%, with potential for even larger increases under favorable conditions. Investors closely monitor the Fed's guidance on inflation, GDP, and employment to anticipate Bitcoin's cyclical, risk-on behaviour, rather than treating it as a safe haven.
Interestingly, Bitcoin's correlation with the US dollar has turned negative (-0.29 in 2025), indicating that Bitcoin is increasingly viewed as a hedge against dollar volatility. As the US dollar experiences fluctuations influenced by central bank actions, institutional investors have turned to Bitcoin as a "digital gold" alternative, seeking to preserve value amid economic uncertainty.
However, central banks like the Federal Reserve and Swiss National Bank remain skeptical of Bitcoin as a reserve currency, emphasising its role as a speculative asset rather than a stable currency substitute. This cautious stance influences broader market sentiment and regulatory outlooks.
Macroeconomic risks such as inflation resurgence, geopolitical tensions, and regulatory uncertainty continue to inject volatility into Bitcoin markets. For instance, fears of renewed inflation prompting Fed rate hikes or abrupt regulatory crackdowns—especially politically motivated actions in the US—pose short-term risks to Bitcoin's price stability.
Market trends suggest a delicate balance. While some experts forecast Bitcoin potentially stabilising around $100,000 to $110,000 barring shocks, bearish views warn of possible price declines below $80,000 due to regulatory tightening, liquidity shocks, or macroeconomic instability.
As we move into the upcoming week, the focus shifts to key macroeconomic data releases and statements from major central bankers, particularly Fed Chair Jerome Powell. Powell is scheduled to speak at a forum hosted by the European Central Bank (ECB) on Tuesday.
Amidst this backdrop, it's important to note that Ether briefly surpassed the 2,500 dollar mark over the weekend. However, political pressure on Fed Chair Jerome Powell is likely to increase, with former President Donald Trump accusing Powell of keeping rates "artificially high."
The chances of the crypto market rally continuing are good, but volatility is likely to remain high due to upcoming data and political tensions. If labour market data show a slowdown, expectations for rate cuts could increase, potentially driving up prices for risky assets, including crypto.
Investors remain on board in the crypto market, with the "Bitcoin Direct ETP" from NxtAssets allowing them to invest in Bitcoin without setting up a wallet, and each unit being backed 100% physically by real Bitcoins. The Bitcoin ETP can be bought directly through an existing portfolio, similar to buying a stock.
The fundamentals for the crypto market have been stronger than ever this year, driven by political tailwinds and increasing mainstream acceptance. As we navigate the complex interplay of central bank policies, macroeconomic data, and political dynamics, it's crucial for investors to manage risk carefully and stay attuned to central bank statements and economic indicators.
Finance plays a crucial role in cryptocurrency investing, as the impact of central bankers' statements and macroeconomic data on Bitcoin's price and market trends is becoming more significant. For instance, investors closely monitor the Fed's guidance on inflation, GDP, and employment to anticipate Bitcoin's cyclical behavior, as the "Bitcoin Direct ETP" is a means for investors to invest in Bitcoin without setting up a wallet.
