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Bitcoin dropped hard. From $109,000 in early 2025 down to around $75,000 now. Crypto analyst Benjamin Cowen thinks he knows why—and it’s not what most people expected.
Cowen says the collapse came after Gary Gensler left the SEC. Lots of traders cheered when Gensler walked out the door. They thought the regulatory pressure would finally lift. But Cowen sees it differently. Without enforcement, bad actors flooded in. Meme coins exploded. Rug-pulls became routine. Nobody faced consequences, so the scams kept coming. Capital drained out of projects with real utility and poured into what Cowen calls “useless assets.” The rally everyone anticipated? It didn’t happen. Bitcoin reversed course instead.
Powell’s Fed Exit Creates New Risk
Now Cowen sees the same pattern playing out with Jerome Powell at the Federal Reserve. Powell’s expected to leave after the latest Fed meeting, where rates stayed at 3.50%-3.75%. Kevin Warsh cleared the Senate Banking Committee and he’s set to take over. Some market participants think this is great news. They’re betting on aggressive rate cuts once Warsh takes the chair.
Cowen’s not so sure. If the Fed looks like it’s lost independence, trust could collapse even if rate cuts happen. Markets don’t just react to policy changes—they react to whether they believe the institution making those changes can be trusted. And right now, that trust feels pretty shaky.
Powell made an unusual move. He’s staying on the Fed’s board even after stepping down as chair. He cited legal pressures for the decision. But it creates a weird situation. Trump can’t appoint an additional member now, which means Powell keeps his influence. Some people are calling it a “two Popes” scenario on the board. One guy’s officially in charge, but the other guy’s still sitting right there with a vote and a voice.
That could get messy fast.
Energy Prices Block Rate Cuts
Turkish commentator Cihan0x.ETH added another wrinkle. Expected rate cuts got pushed back to 2027. Why? Inflation driven by high energy prices, made worse by the conflict in Iran. Energy costs stay elevated, which keeps inflation hot. The Fed can’t cut rates freely when inflation’s running like that, no matter who’s running the show.
Market expectations shifted hard. Rate cuts were supposed to come in 2026. Now they’re looking at 2027 at the earliest. That’s a big delay, and it changes the math for crypto and equities alike.
Powell’s continued presence on the board might actually complicate things more than help. He’s not chair anymore, but he’s still there. Still voting. Still influencing. Warsh will technically lead, but Powell’s shadow looms large. Different approaches within the board could lead to messy decision-making. Markets hate uncertainty, and this setup delivers plenty of it.
The energy sector’s impact on inflation can’t be ignored. The Iran conflict keeps prices high. That inflationary pressure restricts the Fed’s flexibility. Warsh might want to cut rates, but the data might not let him. The economic landscape got a lot more complicated.
Cowen’s analysis points to something deeper than just policy changes. It’s about institutional trust. When Gensler left, people celebrated. When Powell steps down, some will celebrate again. But maybe they’re missing the point. Regulatory oversight matters. Independence matters. Compliance over autonomy might feel good short-term, but the long-term consequences could be rough.
The geopolitical situation adds another layer. Iran’s conflict keeps energy prices elevated. That impacts U.S. inflation directly. The Fed can’t just ignore that and cut rates aggressively. Leadership changes don’t fix structural problems. Warsh inherits an economy constrained by forces outside the Fed’s control.
Market reactions to leadership changes often miss the bigger picture. Gensler’s exit opened the door for scams that drained liquidity from legitimate projects. Powell’s exit might create a Fed that looks less independent, less trustworthy. Both scenarios carry risks that initial celebrations overlooked.
The “two Popes” problem could get worse before it gets better. Powell’s not going anywhere. He’ll sit on that board and vote on policy. Warsh will chair meetings and set the agenda. But what happens when they disagree? The board could split. Decisions could stall. Markets could panic.
Cowen’s warning about trust applies to both situations. The SEC without Gensler became a free-for-all. The Fed without clear, independent leadership could face a similar crisis. Different institutions, same underlying problem—when trust erodes, capital flows get weird and markets get volatile.
The delay in rate cuts from 2026 to 2027 reflects these constraints. Energy prices won’t drop overnight. Iran’s conflict won’t resolve quickly. Inflation stays sticky. The Fed’s hands stay tied. Warsh can’t change that by himself, no matter how aggressive he wants to be.
Frequently Asked Questions
Why does Benjamin Cowen think Bitcoin fell from $109,000 to $75,000?
Cowen attributes the drop to a loss of trust after Gary Gensler left the SEC, which allowed bad actors to launch meme coins and rug-pulls without facing consequences, draining capital from legitimate projects.
Who will replace Jerome Powell as Federal Reserve Chair?
Kevin Warsh is set to succeed Powell after clearing the Senate Banking Committee, though Powell will remain on the Fed’s board as a voting member.
Why have expected rate cuts been delayed to 2027?
High energy prices driven by the conflict in Iran have kept inflation elevated, restricting the Federal Reserve’s ability to cut rates regardless of leadership changes.
