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Analyst Says Gensler Exit Hurt Crypto Trust, Warns Powell Could Too
TL;DR
Analyst Benjamin Cowen claims that the departure of Gary Gensler from the SEC has led to a significant loss of trust in crypto, contributing to Bitcoin's drop from $109,000 to $75,000. He warns that Jerome Powell's potential exit from the Federal Reserve could similarly impact traditional markets.
Key points
- Benjamin Cowen links Gensler's exit to crypto's trust issues
- Bitcoin fell from $109,000 to $75,000 since early 2025
- Cowen warns Powell's exit could harm traditional markets
- Gensler's departure removed consequences for bad actors
- Liquidity in crypto thinned due to focus on meme coins
Widely followed analyst Benjamin Cowen said in an X post Thursday that crypto’s slide since early 2025 tracks a deeper loss of trust that began after Gary Gensler left the SEC, with Bitcoin falling from $109,000 then to about $75,000 now.
His warning goes beyond crypto: he says cheering Jerome Powell’s exit from the Federal Reserve could create the same kind of credibility problem in traditional markets.
A Celebration That Became a Turning Point
Cowen’s argument is blunt: Gensler’s departure was widely cheered, but it essentially removed the threat of consequences for bad actors. What followed, in his view, was a period where influencers and politicians launched meme coins, rug-pulled their followers, and paid no price for it.
Capital that might have flowed into projects with actual utility got sucked into what he called “useless assets,” thinning out liquidity across the board. Bitcoin moved marginally higher after Gensler left, then turned lower, with the rally many expected never materializing in any meaningful way.
According to Cowen, there’s a similar pattern forming around Fed Chair Jerome Powell, following what is expected to be his last meeting as chair on Wednesday, where the Fed held its benchmark interest rate unchanged for the third straight time, leaving rates at 3.50%-3.75%, with four officials dissenting.
Trump appointee Kevin Warsh, already cleared by the Senate Banking Committee, is set to succeed Powell, and just as with Gensler, large parts of the market are treating the former’s exit as a bullish development, expecting the new chair to push through rate cuts more aggressively.
Cowen does not share that confidence:
“If the Fed just becomes another cabinet of the executive branch,” he wrote, “it may lead to a lack of trust in the institution itself.”
His read is that the markets are better off with a Fed that feels independent than with one that feels compliant, even if the compliance delivers the rate cuts traders want in the near term.
What Happens After the Cheer Fades
Turkish crypto commentator Cihan0x.ETH extended Cowen’s logic further, noting that rate cuts are no longer expected any time soon, with the timeline shifting from 2026 expectations to 2027, driven primarily by energy-side inflation rather than demand.
Q&A
How did Gary Gensler's exit from the SEC affect Bitcoin's value?
Gary Gensler's departure is linked to a decline in trust within the crypto market, contributing to Bitcoin's drop from $109,000 to around $75,000.
What are the potential consequences of Jerome Powell leaving the Federal Reserve?
Analyst Benjamin Cowen warns that Jerome Powell's exit could create credibility issues in traditional markets, similar to the fallout seen in crypto after Gensler's departure.
What impact did Gensler's departure have on crypto projects and liquidity?
Cowen argues that Gensler's exit led to a lack of accountability for bad actors, resulting in capital flowing into 'useless assets' and reducing overall liquidity in the crypto market.
