Bitcoin, Privacy Coins Rally as Trump-Powell Conflict Escalates

Federal Reserve Chair Jerome Powell said on Sunday that the Trump administration had threatened him with a criminal indictment and served grand jury subpoenas over testimony he gave in June 2025 regarding a Fed building renovation project according to reports. Powell called the move a "pretext" aimed at pressuring the central bank to lower interest rates.

The escalation in the long-standing dispute between Powell and President Donald Trump came amid broader concerns about the independence of the Federal Reserve. Powell stated that he respects the rule of law but emphasized that the central bank must remain free from political pressure.

Bitcoin rose above $92,000 on Sunday night, with privacy-focused tokens such as Monero and Zcash also seeing significant gains. Investors appeared to be positioning for geopolitical uncertainty and potential instability in the U.S. financial system.

Why the Move Happened

The Trump administration has long criticized the Federal Reserve for maintaining higher interest rates and has pressed for more aggressive rate cuts. According to Powell, the administration's actions are part of a broader effort to influence monetary policy decisions.

Senator Thom Tillis, a member of the Senate Banking Committee, condemned the move as an attack on the independence of the Department of Justice and vowed to oppose Trump's nominees to the Fed until the issue was resolved according to reports.

How Markets Responded

U.S. stock futures dropped sharply after Powell's statement, with the Dow Jones Industrial Average and S&P 500 futures both showing significant declines. The U.S. dollar also weakened against major currencies, with analysts citing concerns about political interference in central banking.

Precious metals and cryptocurrencies saw a strong rally. Bitcoin rose to $92,047, Ethereum gained 1.99% to $3,157, and gold prices climbed nearly 1.3% according to reports. Analysts attributed the move to a "safe-haven rotation" as investors sought assets less vulnerable to political and monetary policy risks.

What Analysts Are Watching Next

Experts are closely monitoring three key factors: Powell's ongoing conflict with the Department of Justice, potential updates on Trump's tax-cut plans, and Tuesday's U.S. Consumer Price Index reading.

Goldman Sachs revised its Fed rate-cut forecast to June and September 2026 from its previous projection of March and June according to reports. If the Fed maintains a dovish stance, it could further support risk-on assets and cryptocurrency markets.

Analysts at Evercore ISI called the situation a "deeply disturbing development" and warned it could trigger a broader sell-America trade according to reports. Meanwhile, experts at HashKey Group noted that if the Trump administration succeeded in pressuring the Fed, it could create long-term uncertainty in the U.S. financial system and boost demand for decentralized assets.