Prediction markets downplay Powell exit risk despite DOJ probe: Asia Morning Briefing

Good Morning, Asia. Here's what's making news in the markets:

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Americas.

Prediction markets are signaling skepticism that political pressure in Washington will translate into the early removal of Federal Reserve Chair Jerome Powell, even after federal prosecutors opened a criminal investigation into the Fed’s $2.5 billion headquarters renovation.

On Polymarket, traders early priced just an 8% chance that Powell would step down as Fed chair by March 31, which barely changed despite Powell accusing the administration of using the probe as a pretext to pressure monetary policy.

A separate Polymarket contract assigns a 67% probability that Powell leaves the Fed Board by late May, showing that even once he leaves the role by the end of his term his influence will likely still be felt on the Board.

Regulated U.S. prediction market Kalshi tells a similar story. Contracts pricing whether Powell will be out as chair before May 2026 jumped to around 19%, up sharply on the day but still implying that markets see removal as a low-probability outcome rather than a base case.

Broader markets are echoing that restraint. Crypto prices were largely unchanged, with bitcoin hovering near $91,400 and ether holding above $3,100, according to CoinDesk market data, suggesting traders are not repositioning for imminent shifts in U.S. monetary policy.

Traditional safe havens moved more decisively, however, with gold climbing above $4,580 an ounce and silver gaining more than 4.5%. On one hand, metals market action could just be a continuing trend of it being more volatile than crypto, or it could be a split from prediction markets as traders prepare for what's assumed to be another era of loose monetary policy under a new Fed chair.

When the new Fed chair is announced, prediction market traders are putting their money on Kevin Warsh, who has a 43% chance of taking the position according to a Polymarket contract.

In Wall Street Journal op-eds, Warsh has argued that inflation was not driven by wars or tariffs but by excessive government spending and an overextended central bank, calling for a smaller, less political Fed, a sharply reduced balance sheet and a return to strict price stability as the core test of central bank independence.

Market Movement

BTC: Bitcoin traded little changed near $91,400, signaling that crypto markets are largely looking past the political drama around the Federal Reserve for now.

$ETH: Ethereum held near $3,125 after pulling back from its 100-day moving average, with momentum indicators still constructive, suggesting $ETH can resume its short-term recovery alongside bitcoin and XRP if key support levels continue to hold.

Gold: Gold rose more than 1% to about $4,573, extending its rally after mixed U.S. jobs data reinforced expectations for Fed rate cuts and underscored a macro backdrop of cooling growth, sticky inflation and a weaker dollar.

Nikkei 225: Japan’s Nikkei 225 was closed for a public holiday, leaving local investors on the sidelines even as broader Asia-Pacific markets tracked Wall Street’s record-setting gains.

Elsewhere in Crypto

• Vitalik Buterin says decentralized stablecoins still face three unsolved problems (The Block)
• Tennessee orders Kalshi, Polymarket and Crypto.com to cease sports betting contracts (CoinDesk)