This post was originally published on this site.
01/25 update below. This post was originally published on January 23
Bitcoin has limped into 2026, flailing in the wake of a gold price boom that’s catapulted it to an eye-watering $34 trillion market capitalization (triggering predictions of even more gains to come).
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The bitcoin price, which plummeted under $100,000 per bitcoin in November, has struggled to regain its early 2025 momentum as Bank Of America’s chief executive issues a serious $6 trillion warning.
Now, with bitcoin and crypto primed for an imminent, “massive” shock, bitcoin-backing BlackRock fixed income chief Rick Rieder has become a surprise favorite to be named as U.S. president Donald Trump’s pick as Federal Reserve chair.
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“I think [bitcoin] will take the place of gold to a large extent? Yeah, I do, because it’s so much more functional than passing a bar of gold around,” Rieder, whose odds of being named as the next Fed chair have rocketed to almost 40% this week on the Polymarket prediction platform, told CNBC in 2020, adding, “I think bitcoin is here to stay.”
“Rick Rieder’s odds of being next Fed chair have increased dramatically,” Geoff Kendrick, head of digital assets research at Standard Chartered Bank, said in emailed comments. “He will run the economy hot which should help crypto.”
01/25 update: Rick Rieder has continued to climb the odds on the Polymarket and Kalsi prediction platforms to succeed Federal Reserve chair Jerome Powell, becoming the surprise favorite and topping former Fed governor Kevin Warsh.
Rieder’s odds topped 60% on Polymarket and Kalshi this weekend before dropping back slightly, while the previous front runner Warsh saw his odds fall sharply to around 30%.
“Until an announcement is made by President Trump, any reporting about the Federal Reserve chairman nominations process is pointless speculation,” White House spokesperson Kush Desai said in a statement to the Financial Times.
Speculation over who will take over from Powell at the Fed has fueled bitcoin, crypto and stock market moves over the last year, with traders betting U.S. president Donald Trump’s eventual appointee will lock in lower interest rates.
“Bitcoin got off to another weak start … having failed repeatedly to break back and hold above $90,000,” David Morrison, senior market analyst at Trade Nation, said in emailed comments, warning the market is “struggling to sustain upside without fresh catalysts,” and pointing to lower exchange-traded fund (ETF) interest as holding back the market.
“This has been a disappointing two days for crypto bulls who could have reasonably expected bitcoin … to have regained upward strength given the rebound in global equities since Wednesday afternoon.”
Meanwhile, the gold price has continued to outperform on the back of the so-called debasement trade that sees investors opt for scarce assets due to expectations the Fed will cut rates this year and government spending will spiral out of control.
“Expectations for at least two Fed cuts in 2026 continue to undermine the dollar, while concerns over U.S. public finances, political pressure on the Fed, and lingering global risks keep gold well bid on dips,” Morrison said.
“Despite short-term overbought signals, gold is on track for a strong weekly gain, and price action suggests pullbacks are being treated as opportunities rather than trend breaks. This is a high-risk trading environment.”
The gold price has soared to $5,000 per ounce, leaving bitcoin and everything else in the dust so far in 2026.
“Gaining nearly 7% since Monday, gold is recording its strongest nominal growth in history and one of its most powerful weeks in terms of momentum,” Alex Kuptsikevich, the FxPro chief market analyst, said in emailed comments, calling its current level “unthinkable” just a couple of years ago.
“The rally is driven by geopolitics, fiscal problems, the associated debasement trade, lower rates and capital outflows from other markets,” Kuptsikevich said.
“When the Fed began tightening monetary policy in 2022, money market fund holdings stood at $5.5 trillion. By the end of 2025, they had increased to $7.7 trillion. As interest rates fall, money will flow into other assets. But to where? Stocks are fundamentally overbought, and bitcoin has fallen out of favour due to declining volatility.”
BlackRock, the world’s largest asset manager, led a Wall Street bitcoin and crypto adoption charge in 2023, with the company spearheading a campaign to bring a fully-fledged bitcoin exchange-traded fund to market.
BlackRock’s bitcoin ETF has rocketed to become one of the fastest growing ETFs of all time following its early 2024 launch, holding almost 800,000 bitcoin worth $70 billion on behalf of investors.
In September last year, Rieder said he thought the bitcoin price is “going to go up,” advising investors to hold bitcoin alongside gold to give them “a little bit of ballast in the portfolio against potential for currency depreciation.”
Fears of further currency depreciation have fueled the so-called debasement trade in recent months, propelling the gold price towards $5,000 per ounce, while investors have also piled into silver.
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Forbes Digital Assets
Trump has teased his decision for current Fed chair Jerome Powell’s replacement for almost a year now, throwing out different names and keeping traders guessing.
Trump said Rieder was “very impressive,” in an interview with CNBC this week. “I’d say we’re down to three, but we’re down to two. And I can probably tell you, we’re down to maybe one, in my mind,” Trump said.
Former Fed governor Kevin Warsh, who has also been a vocal supporter of bitcoin and crypto, remains the front runner, according to Kalshi and Polymarket contracts, after former favorite Kevin Hassett, Trump’s national economic council director, was all but ruled out of the race.
Expectations that interest rates may fall sharply in 2026 once Trump replaces Powell have supported bitcoin, crypto and equity markets in recent months, with Trump repeatedly saying his Fed chair pick will have to promise to heavily cut interest rates.
“Undermining the Fed’s independence makes holding the greenback a less attractive safety play,” Samer Hasn, senior market analyst at XS.com, said via email.
“For the crypto markets, this “politicized dollar” narrative serves as a long-term bull case, even if current prices are dipping. If investors lose faith in U.S. government debt and the Fed’s autonomy, decentralized assets like bitcoin and “hard” assets like gold, which has already seen skyrocketing prices, become the logical hedge against institutional decay.”