Jerome Powell took the stage at yesterday’s FOMC meeting, crushed everyone’s dreams by saying interest rates are staying put, and somehow, Bitcoin reacted by mooning to $105K. Normally, when Powell hits the brakes on rate cuts, Bitcoin does its best impression of an altcoin rug pull… 5%, maybe even 10% down in the blink of an eye.

But not this time. This time, Bitcoin is acting like Powell just lowered rates down to 0% (just like old times). That’s because Powell, of all people, just gave his nod of approval to crypto banking. Yes, I know it’s hard to believe that the same guy who’s been keeping rates high enough to make mortgage brokers cry is now telling banks they can serve crypto customers without fear of a regulatory smackdown.

During the press conference, Powell dropped a sentence crypto junkies have been praying a decade for, “Banks are perfectly able to serve crypto customers as long as they understand and can manage the risks.” In other words: the Fed isn’t here to kill crypto, just to make sure it doesn’t cause another FTX-style disaster.

This is a massive shift in tone. Just a couple of years ago, banks were practically getting sued by regulators for even glancing at Bitcoin. Now, the Fed Chair himself is saying, “Yeah, go ahead… just don’t do anything stupid” (which, knowing banks, is a huge ask). Crypto insiders wasted no time celebrating. Nic Carter of Castle Island Ventures called it an “immense tonal shift,” meaning we might finally be past the era of regulators treating crypto like a shady offshore gambling ring. Bitwise CEO Hunter Horsley took it even further, saying, “Banks will be a major catalyst for crypto in 2025. Mainstream era beginning.” Basically, the crypto kids just got permission to sit at the grown-ups’ table.

So why did Bitcoin suddenly decide it was time to break past $105K? It’s all about banks finally being able to get their piece of the crypto casserole. With Powell’s blessing, banks can custody Bitcoin for clients (aka hold your coins like a piggy bank but with less risk of getting hacked by a teenager in his mom’s basement). They can create structured Bitcoin financial products… posh investment vehicles for people who want exposure to BTC but don’t know how to set up a wallet. And they can allow customers to buy Bitcoin through them (this does make me wonder if Coinbase will lose value now that you’ll be able to buy crypto from Bank of America).

On top of this, the recent repeal of SAB 121 means banks don’t have to treat customer-held Bitcoin as a liability anymore, making it a whole lot easier for them to jump into the market. Throw in the Financial Accounting Standards Board setting clear rules on how banks can handle crypto, and suddenly, the entire sector looks a lot less like the Wild West and a lot more like a serious financial player.

Between Powell’s unexpected thumbs-up and regulatory clarity, 2025 could be the year banks become the biggest Bitcoin buyers. Think about it: we already have spot Bitcoin ETFs sucking up supply like a black hole, and now banks might be next in line. If even a fraction of Wall Street’s trillions start flowing into Bitcoin, $105K could look like a bargain (maybe Cathie’s $1 million price prediction by 2030 isn’t crazy after all… okay, it’s still kinda crazy).

Of course, there’s still the small issue of Congress being as slow as Christmas when it comes to passing actual crypto laws. Powell himself admitted that more regulations would be “helpful”. But if yesterday proved anything, it’s that crypto isn’t going anywhere. And for once, even the Fed is kinda cool with that.

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