Could Bitcoin Benefit from Trump Dismissing Powell? Lessons from Turkey's Lira Plunge Suggest So

The possibility of President Trump firing Federal Reserve Chairman Jerome Powell may have repercussions for Bitcoin, as it could weaken the USD and prompt increased adoption of cryptocurrencies like BTC and stablecoins.

President Erdogan of Turkey's meddling with the central bank highlights the risks, as his actions led to a currency crisis and a surge in investments in digital assets.

Trump's ongoing clashes with the Federal Reserve are no secret. His dissatisfaction with Powell's handling of interest rates has intensified, fueling talks of removing him from office. The President's push for lower borrowing costs despite warnings of potential economic challenges mirrors Erdogan's interference in Turkey's central bank affairs.

Can Bitcoin Benefit From Trump Firing Powell? Turkey's Lira Crisis May Provide Clues

Turkey's President Erdogan's experience with central bank interference serves as a warning, as it led to a currency collapse and increased investment in bitcoin and stablecoins.

Lo que debes saber:

• President Donald Trump's reported plans to fire Federal Reserve Chairman Jerome Powell could weaken USD and accelerate BTC adoption, some say.
• Turkey's President Recep Erdogan's experience with central bank interference serves as a warning, as it led to a currency collapse and increased investment in bitcoin and stablecoins.

Erdogan's interventions resulted in a drastic devaluation of the lira following high inflation rates. This cautionary tale illustrates how tinkering with central bank autonomy amidst inflation concerns can undermine investor trust and trigger a currency downfall, as seen in Turkey.

Trump's issues with the Fed

While the USD might not experience a crash akin to the lira, there are fears it could face significant devaluation if Powell is ousted. Given the dollar's global role as a reserve currency and the pivotal position of U.S. Treasury bonds in international finance, such disruptions could reverberate across global markets.

However, Trump's criticism has recently reached a fever pitch with reports suggesting he is looking for ways to get rid of Powell, who recently warned of stagflation even as the President reiterated calls for lower borrowing costs while suggesting there is no inflation.

Powell's patient approach follows a trade war-led spike in survey-based measures of inflation expectations, which could always become self-fulfilling.

Still, on Monday, Trump went further, calling Powell a "major loser" and warning that the economy could slow down unless interest rates are immediately lowered.

Lesson From Turkey

Erdogan began interfering in the central bank's operations in 2019, and since then, the lira has collapsed sevenfold from 5.3 per dollar to 38 per dollar.

It all started with Turkey's inflation rate reaching double digits in 2017. It remained elevated in the subsequent year, which prompted the country's central bank to increase the one-week repo rate from 17.5% to 24% in September 2018.

The move likely didn't go well with Erodgan, who issued the first decree dismissing Central Bank of Turkey (CBT) governor Murat Cetinkaya in July 2019. From then on until the end of 2021, Erdogan issued multiple decrees dismissing and hiring several CBT officials. Amid all this, inflation remained elevated, and the lira continued to depreciate at an alarming rate.

"We certainly don’t believe in high interest rates. We will pull down inflation and exchange rates with low-rate policy … High rates make the rich richer, the poor poorer. We won’t let that happen," Erdogan said in 2021.

As of 2025, Turkey faces an inflation rate of nearly 40%, according to data source TradingEconomics.

This episode serves as a cautionary tale for Trump, highlighting that tampering with central bank independence — especially in the face of looming inflation — can erode investor confidence and send the domestic currency into a tailspin.

This does not necessarily mean that the USD will crash exactly like lira but may see significant devaluation.

Perhaps it could prove even more destabilizing for global markets, considering the dollar is a global reserve currency, and the U.S. Treasury market is the bedrock for international finance.