A recent decision by U.S. President Donald Trump has sparked a heated response in the cryptocurrency market: he has nominated Bitcoin-supporting economist Stephen Miran to the Federal Reserve Board. This move not only pushed Bitcoin's price up by 2%, surpassing $117,500, but also triggered market expectations for a shift towards looser Federal Reserve policies. However, analysts warn that this appointment could undermine the independence of the Federal Reserve, reviving the high inflation risks seen in the 1970s.

Trump Nominates Miran to Fill Federal Reserve Vacancy

On August 7, 2025, Trump announced on his Truth Social platform the appointment of current Council of Economic Advisers Chair Stephen Miran to fill the vacancy left by the resignation of Federal Reserve Board member Adriana Kugler, with a term ending on January 31, 2026. Trump praised Miran's economic expertise as "unparalleled" and noted his outstanding performance during his tenure at the Treasury Department in the first Trump administration in 2016. Miran, who holds a Ph.D. in economics from Harvard University, has publicly written in support of Bitcoin multiple times, advocating for the integration of digital assets into the traditional financial system and easing related regulatory restrictions.

Miran's appointment requires Senate confirmation, and the Senate is expected to review it after reconvening in September. If approved, Miran will participate in the Federal Open Market Committee (FOMC) meeting on September 16-17, where the market widely anticipates that the Federal Reserve may cut interest rates for the first time since December 2024.

Miran's nomination quickly triggered market volatility. Greg Magadini, head of derivatives at Amberdata, told Decrypt that traders interpreted this appointment as a signal that the Federal Reserve might shift towards a more accommodative monetary policy, which has long been a goal of the Trump administration. As a result, Bitcoin's price rose by 2% following the announcement, breaking through $117,500 and alleviating the market's tension from the previous week.

Magadini analyzed, "The market expects Miran to take a dovish stance, aligning with Trump's pressure. The rise in Bitcoin's price reflects the market's optimistic sentiment towards looser policies." He pointed out that a series of recent pro-cryptocurrency policies from Trump, such as allowing 401(k) retirement accounts to invest in crypto assets and banning banks from "de-banking" crypto companies, further bolstered market confidence.

Combined with Trump's earlier executive order allowing $87 trillion in 401(k) funds to invest in digital assets like Bitcoin, market liquidity is expected to increase further. This not only propelled a short-term rise in Bitcoin's price but also laid the groundwork for a crypto bull market in 2025. Analysts predict that an influx of institutional funds could push Bitcoin's price to new historical highs, potentially reaching even more astonishing levels before the 2034 halving.

Despite the positive market reaction to Miran's appointment, some analysts expressed concerns. Magadini warned that if the Federal Reserve loses its independence and anti-inflation capacity under Trump's pressure, it could lead to a crisis scenario reminiscent of the 1970s. He recalled that the collapse of the Bretton Woods system in the 1970s caused gold prices to soar from $35 per ounce to $700 per ounce by 1980, and the current environment—characterized by weak demand for U.S. Treasury auctions, rising gold prices, and uncertainty in Federal Reserve policies—bears striking similarities to that time.

The Bretton Woods system was a global monetary order established after World War II, linking various currencies to the dollar, which was convertible to gold. This system ended in 1973 when it shifted to floating exchange rates. Magadini noted that current inflation data (with the personal consumption expenditures index at 2.6%, above the Federal Reserve's 2% target) indicates that inflationary pressures remain, and market concerns about inflation are driving up gold prices. He believes that if inflation expectations continue to rise, cryptocurrencies, as "digital gold," may see greater upward potential.

However, Magadini also emphasized that the total market capitalization of the crypto market (approximately $2.5 trillion) is still insignificant compared to traditional assets, with Nvidia's market cap alone exceeding the total of all cryptocurrencies. This means that the influence of the crypto market within the global financial system still has room for growth, but its potential as an inflation hedge cannot be overlooked.

Trump's nomination of Stephen Miran to the Federal Reserve not only injects new vitality into Bitcoin and the crypto market but also sparks widespread discussion about the future direction of Federal Reserve policies. The rise in Bitcoin's price reflects the market's optimistic expectations for looser policies, while the opening of 401(k) funds further adds momentum to the bull market. However, the potential risks to the Federal Reserve's independence and the rising inflation pressures remind investors that the future market may present both opportunities and challenges.

For crypto investors, Miran's appointment is a clear positive signal, but it is crucial to remain vigilant and monitor macroeconomic data and Federal Reserve policy trends. As the September 2025 FOMC meeting approaches, the movements of Bitcoin and the entire crypto market will be closely watched.

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