In a stark analysis shared on X, widely followed crypto analyst Benjamin Cowen has argued that the crypto market's decline since early 2025 is a direct consequence of eroding trust that began when Gary Gensler left the U.S. Securities and Exchange Commission (SEC). Cowen notes that when Gensler stepped down in January 2025, Bitcoin (BTC) was trading near $109,000. As of late April 2026, BTC has fallen to roughly $75,000, a drop of over 30% that contradicts the widespread expectation that Gensler's exit would unlock a sustained rally.
Cowen contends that Gensler's departure removed the credible threat of regulatory consequences, unleashing what he calls the 'grift age of crypto.' According to his analysis, influencers and politicians rushed to launch memecoins and execute rug pulls on their followers without fear of repercussions. This led to a massive misallocation of capital, with liquidity flowing into speculative 'useless assets' rather than strengthening the broader ecosystem, ultimately thinning out liquidity across the board.
Cowen now warns that a similar pattern is forming around Federal Reserve Chair Jerome Powell, who is expected to leave his post following the Fed's April 2026 meeting. The Fed held its benchmark interest rate unchanged at 3.50%-3.75% for the third straight meeting, with four officials dissenting. Trump appointee Kevin Warsh, already cleared by the Senate Banking Committee, is set to succeed Powell. Just as with Gensler, a large part of the market views Powell's exit as bullish, expecting the new chair to push through rate cuts more aggressively.
'If the Fed just becomes another cabinet of the executive branch, it may lead to a lack of trust in the institution itself,' Cowen wrote, suggesting that markets are better off with an independent Fed than a compliant one, even if compliance delivers the rate cuts traders want in the near term.
Adding to the complexity, Turkish crypto commentator Cihan0x.ETH extended Cowen's logic, noting that rate cut expectations have already shifted from 2026 to 2027, driven primarily by energy-side inflation from the war in Iran, which has kept global energy prices elevated. Meanwhile, Powell announced he plans to remain on the Fed's board after his chairmanship ends, citing 'unprecedented' legal pressure from the Trump administration. This decision prevents Trump from filling an additional board seat and could create a 'two Popes' dynamic with both a sitting and former chair on the same governing board.
Bitcoin has also shown a consistent pattern around Federal Open Market Committee (FOMC) meetings. Trader Max Trades highlighted that BTC dropped sharply after each of the last seven FOMC decisions. The current setup closely mirrors conditions seen before the March meeting, which resulted in a 13% correction after price rallied into the event, repeatedly sweeping local highs while building liquidity below.
