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Bitcoin (BTC) was treading water just below $85,000 late Thursday as tensions between U.S. President Donald Trump and Federal Reserve Chair Jerome Powell added another layer of uncertainty for investors.
Markets dipped on Wednesday after hawkish comments from Powell, who criticized Trump’s tariffs policy, saying that it would likely result in a slowing economy and rising prices — what economists call “stagflation." In his remarks, Powell made clear his larger focus for now would be on prices, suggesting tighter Fed policy than otherwise thought.
Trump — who nominated the former investment banker and lawyer as Fed chair during his first term (Powell was given a second four-year term by President Biden) — has expressed his displeasure with Powell since retaking the White House. Powell, though, who is set to remain atop the central bank until May 2026, has repeatedly stated his determination to finish his term and suggested the president has no standing to fire him.
On Thursday, the WSJ reported that Trump has been privately discussing firing Powell for months, according to people familiar with the matter. Former Fed Governor Kevin Warsh is reportedly waiting in the wings as Powell's replacement, but Warsh has lobbied the president not to move against the Fed chair, according to the story.
Joining Warsh in that warning is Treasury Secretary Scott Bessent, who said the move could roil already shaky U.S. markets as the central bank is supposed to be independent from political influences.
Odds of Trump removing Powell this year on the blockchain-based prediction market Polymarket rose to 19%, the highest reading since the contract's late January launch.
Trump's comments came on the back of the European Central Bank (ECB) cutting key interest rates for the seventh consecutive occasion on Thursday as it warned of a deteriorating growth outlook.
More pressure on markets came from the latest Philadelphia Fed manufacturing index, published Thursday morning, which showed a nosedive in activity this month, sinking to its lowest level (-26.4) in two years. Meanwhile, the prices paid index climbed to its highest reading since July 2022, adding to concerns about the Trump administration's large-scale tariff policy pushing the U.S. economy into stagflation.
The S&P 500 and tech-heavy Nasdaq stock indexes traded mostly flat during the day.
A look at the crypto market showed BTC and Ethereum's ETH up 0.8% over the past 24 hours. Most assets in the CoinDesk 20 Index traded higher during the day, with bitcoin cash (BCH), NEAR and AAVE leading gains.
How bitcoin traders position amid heightened fear on Wall Street ?
Bitcoin has stabilized between $83k and $86k with traders chasing bullish bets while still seeking downside protection.
On Deribit, traders are actively chasing calls at the 90k to $100k strikes expiring in May and June, the exchange said in a market update Thursday. The demand for calls indicates expectations for a continued price rally.
Some of these bullish bets have been funded by premiums collected by selling put options.
At the same time, there has been renewed interest in buying put options at $80k expiring this month, representing preparations for potential price declines. Buying a put option is akin to purchasing insurance against price slides.
The diverse two-way flow comes as the VIX, Wall Street’s fear gauge measuring the 30-day implied volatility, still remains well above its 50-day average, despite the pullback from recent highs above 50.
The VIX is warning that the macro situation is still unraveling rather than resolving, the exchange said on X.
Kyrgyzstan President Sadyr Japarov took his country a step closer to issuing its own central bank digital currency Thursday, signing legislation that gives the "digital som" legal status.
The central Asian country is still deciding whether or not to issue a CBDC, but Thursday's amendments to the Constitutional Law of the Kyrgyz Republic ensures that the digital som will be treated as legal tender if the central bank goes ahead with issuing a CBDC.
"The purpose of the Constitutional Law is to launch a pilot project of a prototype of a national digital currency, the 'digital som,' as well as to create a legal basis and its status," a statement on the president's site said.
Under the new provisions, the National Bank of the Kyrgyz Republic will be able to develop and approve rules for conducting payments on the digital som platform.
These provisions, described as amendments on the president's website, were first adopted on March 20 by Kyrgyzstan's supreme council. The country is due to begin testing the digital som this year, according to local news outlet Trend News Agency. The country is not expected to make a final decision on whether to issue the CBDC until next year.
The idea of CBDCs has been controversial among some crypto proponents, but countries like the U.K., Nigeria, Jamaica and the Bahamas — as well as the European Union's multinational bloc — have moved in the direction of issuing a CBDC, while other countries like the U.S. have largely moved away from the idea of issuing one.
Hidden Road, the prime brokerage firm that's being acquired by Ripple, has obtained approval to operate as a U.S. broker-dealer from the Financial Industry Regulatory Authority (FINRA), the company said Thursday.
The license, granted to its subsidiary Hidden Road Partners CIV US LLC, will allow the firm to expand its fixed income prime brokerage platform, according to the press release. With the broker-dealer status, the firm plans to offer institutional clients a broader range of regulatory-compliant services in clearing, financing and prime brokerage of fixed income assets.
"[This] is a significant step in the development of Hidden Road’s fixed income prime brokerage platform and bolsters our capabilities in traditional financial markets," Noel Kimmel, the firm’s president, said in a statement.
The development follows Hidden Road’s announcement earlier this month that it had entered into an agreement to be acquired for $1.25 billion by Ripple, the blockchain infrastructure services firm closely associated with the XRP Ledger (XRPL) network. The acquisition is subject to regulatory approval and expected to close in the coming months.
Backed by Ripple’s resources, Hidden Road said it expects to scale services significantly and position itself as one of the largest non-bank prime brokers. The firm also said earlier that it plans to migrate its post-trade operations onto the XRPL network, aiming to reduce costs and streamline settlement processes.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
Crypto exchange giant Kraken has laid off hundreds of staffers across all areas of the business over the past several months, as the firm continues to streamline its operations ahead of a potential public listing in the U.S., according to two people familiar with the situation.
Kraken was reported to have laid off 400 staff, or about 15% of its workforce, at the end of October last year, when Silicon Valley investor and Kraken board member Arjun Sethi became co-CEO alongside David Ripley, who took the reins when former CEO Jesse Powell stepped down in 2023.
Since Sethi became co-CEO, “hundreds more have gone,” said a person familiar with the situation, who pointed to a rolling program of firings over and above the 15% cut late last year.
“They're culling aggressively across all functions, and it's a constant and ongoing thing. It’s about improving Kraken’s EBITA [earnings before interest, tax and amortization],” the person said.
When the CEO role was split last year, Sethi and Ripley said in a blog post that there was a need to shed “organizational layers” that had accumulated in Kraken, and make the business “leaner and faster.”
Several crypto firms are currently getting their houses in order to launch an initial public offering (IPO) this year or early next year. Kraken has also been pushing for increased revenues by acquiring businesses such as derivatives platform Ninja Trader, for instance, and recently announcing the addition of stock trading.
"Kraken's business is thriving. We're launching more new products than ever before, driving strong revenue growth, and rapidly expanding across our entire product portfolio — including through the agreement to acquire NinjaTrader, announced earlier this year,” a Kraken representative told CoinDesk.
"At the same time, we continuously evaluate our workforce to ensure it aligns with our strategic priorities. We're approaching this with discipline and intention, making the difficult decision to eliminate certain roles and consolidate teams where redundancies exist, while continuing to hire in key areas of the business," the Kraken spokesperson said.
Interoperability protocol LayerZero's native token (ZRO) surged Thursday on news that venture capital firm Andreessen Horowitz's (a16z) crypto arm increased its investment in the project.
The company acquired additional $55 million ZRO tokens committing to a 3-year lock-up period, general partner Ali Yahya said in an X post. A16z has been an early backer of the protocol's development firm LayerZero Labs, participating in the team's $135 million series A fundraising round in 2022 and the following $120 million series B round in 2023.
ZRO advanced 10% to $2.56 following the announcement before shedding some of the gains. The token was recently up around 5% during the day, outperforming the broad-market CoinDesk 20 Index and bitcoin (BTC) gains.
LayerZero is a key piece of infrastructure that allows communication between isolated blockchains with cross-chain messages. The protocol underpins 125 blockchains, has facilitated over 145 million cross-chain messages and $75 billion in value transfers. Its tech supports projects such as PayPal's stablecoin, DeFi protocols Ethena and Pendle, and was selected as an issuance partner for Wyoming's stablecoin project.
The investment will help the protocol expand beyond interoperability to token issuance, data management, governance and improving databases, according to an email.