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Bitcoin tumbled to a seven-week low on Tuesday as investors shunned risk following U.S. President Donald Trump’s unprecedented dismissal of Federal Reserve Governor Lisa Cook, raising concerns over the central bank’s independence.
As of 01:59 ET (05:59 GMT), Bitcoin traded 1.8% lower at $110,231.8, its lowest since July 9, retreating nearly 12% from an August peak above $124,000, erasing much of the rally fueled by expectations of an imminent Fed pivot toward rate cuts.
Trump Fires Fed Governor
Trump announced Cook’s removal over alleged mortgage fraud related to 2021 home loan documents. Cook disputes the allegations, calling her dismissal unlawful and a threat to the Fed’s political independence, according to the Washington Post.
Markets reacted sharply to the rare ousting of a sitting Fed governor, stoking fears of political interference in U.S. monetary policy. Investors now face uncertainty over whether the Fed can provide policy guidance free from political pressure. The move follows weeks of Trump’s public criticism of Fed Chair Jerome Powell, pressuring him for more aggressive rate cuts.
Cryptocurrencies Sensitive to Rate Shifts
Digital assets, which are highly responsive to U.S. interest-rate expectations, fell as investors anticipated higher political risk. Lower borrowing costs typically support speculative assets like cryptocurrencies, but concerns over Fed independence weighed heavily on sentiment.
Altcoins Follow Risk-Off Trend
Most major altcoins saw significant declines amid the broad sell-off:
- Ethereum (ETH): -5.7% to $4,439.4, after hitting a record $4,955 earlier this week
- XRP: -1.7% to $2.93
- Solana: -7%
- Cardano: -6.2%
- Polygon: -4.1%
- Dogecoin: -6.6%
- $TRUMP token: -3.2%
Investors remain cautious as political developments in Washington add to volatility in the crypto market, with potential implications for interest-rate expectations and broader risk sentiment.
