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Bitcoin rallied more than 3% on Monday, climbing to its highest level in nearly three weeks, as markets responded to a sharp decline in the U.S. dollar triggered by rising concerns over the independence of the Federal Reserve.
By 02:31 ET (06:31 GMT), Bitcoin rose 3.2% to $87,518.0, recovering nearly all of its losses since April 2, when President Donald Trump announced sweeping reciprocal tariffs that had rattled global risk sentiment.
Dollar Slides on Powell Dismissal Speculation
The move higher in Bitcoin tracked the U.S. dollar’s plunge to a three-year low, as political headlines sparked fears over the Federal Reserve’s autonomy.
- The U.S. Dollar Index fell to levels last seen in March 2022.
- The pressure intensified after White House economic adviser Kevin Hassett confirmed that Trump’s team was “studying the legality of firing Fed Chair Jerome Powell.”
- In a Truth Social post, Trump wrote: “Powell’s termination cannot come fast enough!” while also reiterating calls for aggressive rate cuts.
The suggestion of direct political interference in monetary policy undermined investor confidence in the dollar, pushing traders toward alternative stores of value.
Bitcoin Finds Support as Confidence in Fiat Weakens
Bitcoin, long touted as a hedge against both currency devaluation and political instability, gained from the perceived risks in the traditional monetary system.
- Like gold, which hit a record high on Monday, Bitcoin benefited from the declining purchasing power of fiat currencies.
- Crypto markets were further buoyed by renewed hope for U.S. trade talks with Japan and China, after Trump last week announced “big progress” in negotiations with Japanese officials in Washington.
- A Bloomberg report also indicated that Beijing is open to fresh talks, provided the U.S. government adopts a more respectful tone.
Crypto Market Overview: Altcoins Follow Bitcoin’s Lead
Bitcoin’s gains spilled over into the broader crypto market:
- Ethereum (ETH) rose 2.6% to $1,647.57
- XRP jumped 2.7% to $2.1276
- Cardano (ADA) led major altcoins with a 3% gain
- Solana (SOL) rose 0.6%, while Polygon (MATIC) added 2.6%
- Dogecoin (DOGE) gained 2.4%, while $TRUMP was largely flat
Outlook
With political tensions in Washington spilling over into monetary policy, and global trade talks still in flux, Bitcoin and other digital assets may continue to attract inflows as traders seek to hedge against currency volatility and macroeconomic uncertainty.
However, market participants remain cautious as any concrete developments—either in Fed leadership or trade negotiations—could quickly alter the current sentiment.
