Bitcoin surged 1.5% on Monday to reach $92,094, buoyed by rising tensions between President Donald Trump and Federal Reserve Chairman Jerome Powell. The conflict between these two powerful figures has unsettled broader markets, causing U.S. stock futures to decline while Bitcoin’s price climbed, signaling a noteworthy divergence from its typical correlations.
During the weekend, Fed Chair Powell revealed that the Federal Reserve had received a subpoena from the Department of Justice and faces a potential criminal indictment related to renovations at its headquarters. Powell alleges that this legal action is politically motivated, suggesting that it aims to pressure the central bank into more aggressive interest rate cuts.
This upcoming conflict in the governance of U.S. monetary policy comes as Trump has increasingly criticized Powell, labeling him a “numbskull” and insisting that the Fed lower interest rates to as low as 1% to stimulate economic growth. As Powell’s term is set to expire in May 2026, the markets are watching closely to see how this power struggle will unfold.
Bitcoin Displays Safe Haven Traits
While Bitcoin traded within its recent range of $89,000 to $95,000, its price movement on Monday contrasted sharply with the declines in tech stocks, with Nasdaq futures down 0.8% and S&P 500 futures falling 0.5%. This unusual shift indicates that traders may be viewing Bitcoin as a safe haven asset during times of political uncertainty.
The positive momentum in Bitcoin aligns with gold, which recently hit a new high of $4,600 per ounce, further supporting the notion that investors are flocking to assets deemed less volatile amidst such turmoil.
The Federal Reserve had previously cut interest rates by 25 basis points in December to 3.5%, and indications suggest that rates will remain steady at least until March amidst this charged atmosphere.
Despite the political chaos, prediction markets indicate a low probability of Powell stepping down early, with expectations that he will remain in his role until his term concludes.
Global Uncertainty Looms Large
The state of global politics remains tumultuous, further amplifying market caution. Trump’s renewed push for U.S. control of Greenland has arisen amidst escalating tensions, while diplomatic strains between China and Japan remain unresolved. Investor concerns have heightened amid unrest in Iran and ongoing conflicts in Ukraine and Russia.
As this backdrop continues to unfold, the dollar index slipped to 99.00 from a previous high of 99.26, as investors reassess the independence of central banks. The broader cryptocurrency markets mirrored Bitcoin’s upward trend, with most altcoins capturing modest gains while maintaining their recent trading ranges.
Looking ahead, U.S. consumer price index data set to be released on Tuesday is expected to provide crucial insights into the Federal Reserve’s future interest rate strategy. As Bitcoin trades at approximately $92,000 during the late Asian trading session, its resilience compared to weakening equity futures underscores its evolving role as a potential safe haven in increasingly uncertain times.
