Bitcoin (BTC) held steady near $88,000 on Thursday after a volatile session that saw prices briefly surge toward $90,000, fueled by optimism that U.S. President Donald Trump's incoming Federal Reserve Chair will push for steep rate cuts.
Trump said he plans to appoint a new Fed Chair who believes in lowering interest rates "by a lot."
"I'll soon announce our next chairman of the Federal Reserve, someone who believes in lower interest rates by a lot,"Trump said in a speech Wednesday. "Early in the new year, you will see this."
The announcement sparked a wave of bullish sentiment across crypto markets, with traders betting that looser monetary policy could reignite risk appetite and drive fresh liquidity into digital assets.
Related: Federal Reserve removes massive hurdle for crypto bankers
Trump promises of cheap money
Trump's remarks follow months of speculation over who will succeed current Fed Chair Jerome Powell, whose term ends in May.
The president has interviewed several candidates, including Christopher Waller, a pro-crypto Fed Governor known for advocating lower rates, as well as former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett.
Markets interpreted Trump's comments as a strong signal that the era of restrictive U.S. monetary policy may soon end.
Data from CME Group's FedWatch Tool still shows a 73.4% probability that the Fed will hold rates steady in January, while Polymarket puts the odds at 76%. However, traders are increasingly pricing in multiple rate cuts in the second half of 2025 once Trump's pick takes office.
However, traders are increasingly pricing in multiple rate cuts in the second half of 2025 once Trump's pick takes office.
Analysts see volatility but renewed bullish bias
LVRG Research Director Nick Ruck said the market's sharp swings stemmed from a combination of macro uncertainty and thin year-end liquidity.
"The recent volatility in Bitcoin stems primarily from broader risk-off sentiment in global markets, reduced ETF inflows, deleveraging in derivatives, and increased correlation with equities amid uncertainty over monetary policy," Ruck said.
He added that Bitcoin's current range reflects "year-end portfolio repositioning" and fading hopes for a so-called Santa Claus rally.
Vincent Liu, CIO at Kronos Research, agreed that BTC is waiting for a fresh liquidity catalyst.
"After a strong run, flows have cooled, leverage has reset, and the market is waiting for a real catalyst," Liu said. "Until fresh liquidity shows up, chop is the base case."
Still, he emphasized that the market's structure remains resilient: "It's not crypto winter yet. Price is holding above the True Market Mean around $81,000. Lose that level, and winter risk rises."
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A potential pivot point for crypto
Traders say Trump's pro-growth rhetoric could mark a turning point for digital assets that have faced months of macro pressure. Lower borrowing costs historically encourage risk-taking and have often coincided with bullish crypto cycles.
With markets now betting that Trump's incoming Fed Chair will open the door to multiple cuts — possibly bringing rates back toward 1% — analysts see room for Bitcoin to extend gains into early 2026.
"Cheaper money, higher liquidity and reduced yields on traditional assets could all converge to reignite the next leg of the crypto bull market," Ruck said.
Related: Trump admin reduces SEC team handling crypto enforcement
This story was originally published by TheStreet on Dec 18, 2025, where it first appeared in the Federal Reserve & FOMC News section. Add TheStreet as a Preferred Source by clicking here.
