Before Trump reveals the new Fed Chair, Bitcoin may be difficult to fully value? A rate cut in September could become a key catalyst.

Renowned economist Alex Krüger warned that Bitcoin (BTC) current price has not yet fully reflected the potential impact of the Federal Reserve (FED) possibly shifting to a more accommodative policy, and this key variable depends on whom U.S. President Donald Trump will nominate to replace current chairman Powell. With the market widely expecting the first rate cut in September, this personnel decision could become the biggest catalyst for Bitcoin’s valuation.

Interest rate cut expectations rise in September

Krüger commented this week that he firmly believes the current bull market cycle in the cryptocurrency market has not ended, as the Federal Reserve’s policy shift will pave the way for a more dovish monetary environment.

“When Trump announces Powell’s successor, the market will immediately price in this change,” Krüger emphasized.

According to the data from the Chicago Mercantile Exchange (CME) FedWatch tool, 83.9% of investors expect the Federal Reserve (FED) to cut interest rates at the meeting on September 17, which is consistent with Krüger’s prediction.

Trump and Powell have a tense relationship

Since Trump took office in January this year, his relationship with Powell has continued to deteriorate. Trump has repeatedly criticized the Federal Reserve (FED) for its hesitation on interest rate cuts, even stating on April 17, “Powell’s firing is not fast enough!”

Florida Senator Rick Scott subsequently publicly supported replacing the Fed leadership, believing it is time to bring a new direction to U.S. monetary policy.

Potential Candidates and Market Impact

According to CNBC, the Trump administration is considering 11 potential candidates, including Jefferies Chief Market Strategist David Zervos, BlackRock Global Fixed Income Investment Director Rick Rieder, and former Federal Reserve Board member Larry Lindsey.

Sources reveal that Trump has narrowed down the list to 3-4 candidates and may announce the results earlier than the market expects.

Krüger believes that if the new chairman belongs to the “moderates”, Bitcoin may welcome a new round of valuation reassessment, even pushing the BTC price to break through the current range.

Funds Observation and Potential Reflow

David Duong, the head of institutional research at a certain CEX exchange, stated that a large amount of retail funds are currently sitting in money market funds waiting and observing. Once The Federal Reserve (FED) shifts to a loosening policy, this portion of funds may flow back into the cryptocurrency market in the medium term, providing additional upward momentum for BTC.

Krüger added that the “full valuation” of Bitcoin will depend on the market’s judgment of the new Fed chairman’s policy stance, which means that Trump’s nomination will become a significant turning point for the crypto market.

Conclusion

With the expectation of interest rate cuts rising in September, the Bitcoin market is currently in a critical wait-and-see period. Trump’s personnel decisions regarding the new Federal Reserve chairman will not only affect the direction of U.S. monetary policy but may also become an important catalyst for a breakthrough in BTC prices. Investors need to closely monitor the intersection of politics and economics, as this will directly impact the next moves of the crypto market. For more real-time quotes and in-depth analysis, please follow the official Gate platform.