In brief
Trump has tapped Bitcoin-friendly economist Stephen Miran for a seat on the Federal Reserve Board.
Bitcoin jumped 2%, topping $117,500 as traders expect looser Fed policy under Miran.
Still, one analyst warns the Fedβs credibility could erode, echoing 1970s inflation risks.
Bitcoin has shaken off the prior week’s market jitters to regain a foothold near $117,500, following President Donald Trumpβs surprise pick of economist Stephen Miran for the Federal Reserve Board.
In a statement Thursday on Truth Social, Trump said Miran, who currently serves as chairman of the Council of Economic Advisors and a known Bitcoin supporter, would fill a seat vacated last week by Adriana Kugler, and serve through Jan. 31, 2026.
Trump called Miranβs economic expertise βunparalleledβ and said he βserved with distinctionβ during the first Trump administration in 2016.
Miran served in the Treasury Department during that time and has written publicly in support of Bitcoin on multiple occasions.
Greg Magadini, director of derivatives at Amberdata, said traders are interpreting Miranβs appointment as a shift toward easier policy from a Federal Reserve that has faced mounting pressure from the Trump Administration.
βHeβs expected to be dovish, which is what Trump wants,β Magadini told Decrypt. βThe market reaction seems to think so.β
At the same time, Magadini warned of deeper structural risks if the Fed shifts in Trumpβs favor.
βIf the Fed loses its independence and ability to fight inflation, this starts to look like a mini 1970s moment,β he said. βIn the 1970s, the end of Bretton Woods sent gold from $35/oz in 1970 to $700/oz by 1980. The current environmentβpoor Treasury auctions, rising gold prices, and uncertainty around Fed policyβhas parallels.β
The Bretton Woods system was a post-WWII global monetary order that pegged currencies to the U.S. dollar, which was convertible to gold. The Bretton Woods system, which established the IMF and World Bank, lasted until the shift to floating exchange rates in 1973.
Magadini said investors are closely watching Fed signals as inflation remains stubborn. The latest PCE reading came in at 2.6%, above both the Fedβs 2% target and the prior three-month average of 2.3%.
βU.S. Treasury auctions have shown weak demand in recent weeks, and gold prices have continued to climb,β he said. βThis tells me the market views all this as inflationary.β
While Bitcoin is often referred to as “digital gold,” Magadini noted that the total market capitalization of the entire crypto market remains small compared to traditional assets.
βNVIDIA alone is worth more than all the crypto market caps combinedβthatβs over 5,000 cryptocurrencies, and one stock is worth more than all of them,β he said. βI think crypto has a lot of room to move higher if the market becomes more worried about inflation.β
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