Bitcoin Holds Below $85K Amid Trump-Powell Clash and Stagflation Fears

Bitcoin (BTC) hovered just below $85,000 late Thursday as escalating tensions between President Donald Trump and Federal Reserve Chair Jerome Powell stirred market uncertainty. The standoff comes after Powell criticized Trump’s tariff policies, warning they could trigger stagflation — a mix of slowing growth and rising inflation. Powell’s hawkish stance dampened hopes of policy easing, sending shockwaves across markets.

While Trump has expressed frustration with Powell, whom he initially appointed during his first term, the Fed chair remains committed to completing his tenure through May 2026. According to the Wall Street Journal, Trump has been weighing Powell’s removal for months. Though former Fed Governor Kevin Warsh is seen as a possible successor, both Warsh and Treasury Secretary Scott Bessent have reportedly cautioned against the move, citing potential market disruption.

Meanwhile, the odds of Powell’s removal hit 19% on blockchain-based prediction platform Polymarket — the highest since the contract's launch in January. The pressure on markets intensified further after the ECB slashed rates for the seventh straight time, citing worsening growth prospects, and the Philadelphia Fed index sank to a two-year low of -26.4. Rising prices in the same report only added to fears of U.S. stagflation.

Despite the turbulence, BTC and Ethereum (ETH) both edged up 0.8% over the past 24 hours. The CoinDesk 20 Index showed most assets in the green, with Bitcoin Cash (BCH), NEAR, and AAVE leading gains.

On Deribit, traders chased bullish BTC call options at $90K to $100K for May and June, while also hedging with $80K puts expiring this month. Elevated VIX levels suggest macro fears are still in play, signaling ongoing caution in both traditional and crypto markets.