Powell Could Damage Crypto Trust Like Gensler Did
Analyst Benjamin Cowen warns that if the Federal Reserve becomes too politically aligned, market-friendly policies could backfire and damage crypto confidence — repeating what happened after Gary Gensler's departure from the SEC.
Key Takeaway
Market-friendly Fed policy could backfire if driven by politics rather than economics, repeating Gensler's trust damage.
Analyst Benjamin Cowen warned that Federal Reserve Chair Powell poses a risk to crypto market confidence if monetary policy becomes too politically aligned.
Cowen said a more politically driven Federal Reserve could weaken investor confidence even if markets get the lower interest rates they want. He compared the scenario to Gary Gensler's exit from the SEC — an event the industry celebrated but that ultimately hurt trust in the regulatory framework.
Gensler officially stepped down as SEC Chair on January 20, 2025, after years of aggressive enforcement against major crypto firms including Grayscale and Coinbase. His departure came after the industry widely disliked his strict interpretation of securities law.
But Cowen's analysis suggests the aftermath wasn't as positive as hoped. Capital shifted toward memecoins and rug-pulls in the months following Gensler's exit. The SEC under new Chairman Paul Atkins withdrew 14 proposed rulemaking notices on June 12, 2025, easing compliance burdens on smaller firms.
Yet the regulatory vacuum created uncertainty of a different kind. Cowen's warning about Powell suggests that market-friendly policies from institutions like the Fed could backfire if they appear too influenced by political pressure rather than economic fundamentals. Atkins took over after Gensler announced his resignation on November 21, 2024.
This article was written based on reporting from CryptoPotato.
