Cowen’s core claim, trust evaporated after Gensler

Analyst Benjamin Cowen, writing on X, argues that crypto’s slide since early 2025 reflects a deeper loss of trust that started after Gary Gensler left the SEC.

CoinDesk’s source text says Cowen links that shift to expectations that bad actors would face fewer consequences. He also points to what he calls a period where influencers and politicians pushed meme coins, rug-pulled followers, and faced little meaningful fallout. In his view, capital that might have supported projects with “actual utility” instead flowed into “useless assets,” draining liquidity across the market.

The same source text says Bitcoin briefly moved up after Gensler left, then fell, with the rally many expected failing to materialize in any meaningful way. It cites Bitcoin moving from about $109,000 to roughly $75,000.

Powell’s exit risk, credibility beats rate-cut hopes

Cowen’s warning does not stay in crypto. The source text says he extends his logic to traditional markets, arguing that cheering Jerome Powell’s Federal Reserve exit could create a similar credibility problem.

The source text describes Wednesday’s Fed decision as a benchmark interest rate hold for the third straight time, leaving rates at 3.50% to 3.75%, with four officials dissenting. It also says Trump appointee Kevin Warsh is set to succeed Powell after clearing the Senate Banking Committee.

According to Cowen, the market is treating Warsh’s arrival as bullish, with traders expecting more aggressive rate cuts. Cowen disagrees. The source text quotes him saying that if the Fed becomes “another cabinet of the executive branch,” it could lead to a lack of trust in the institution itself. His framework is blunt: markets do better with a Fed that feels independent, even if near-term compliance helps deliver the rate cuts traders want.

Timeline shift, energy inflation reduces Fed room

A Turkish crypto commentator, Cihan0x.ETH, extends the argument in the same source text by saying rate cuts are not expected soon. The timeline, the text says, shifts from 2026 expectations to 2027, driven mainly by energy-side inflation rather than demand.

The source text says the Fed’s own statement pointed to “the recent increase in global energy prices” as a contributing factor. The logic presented here is that this type of inflation tightens constraints on Fed action.

“Two Popes” on the board after Powell

The source text also adds a structural detail. It says Powell plans to remain on the Fed’s board after his chairmanship ends next month, citing “unprecedented” legal pressure from the Trump administration as the reason he does not yet feel it is appropriate to leave.

That decision, the source says, denies Trump a chance to fill an additional board seat. Some analysts are calling this a “two Popes” dynamic, meaning a sitting chair and a former chair both on the seven-member governing board.

What this means for crypto assets

Cowen’s thesis is about trust, not technology or token mechanics. Even so, the source text frames the issue as a market-wide credibility problem that can pull liquidity away from risk assets, including crypto assets, when enforcement risk or institutional independence feels weaker.