Ethereum News Today: Trump's War on the Fed Unfolds as Dollar Wavers and Crypto Splits

President Donald Trump has taken a dramatic step by removing Federal Reserve Governor Lisa Cook from her position, citing allegations of mortgage fraud. This move, announced on Truth Social, has been interpreted as an attempt to assert greater influence over the central bank and its monetary policy decisions. Cook, the first Black woman to serve on the Fed’s board, had a term set to expire in 2038, making her removal an early and controversial action by the administration. The allegations, raised by Trump appointee Bill Pulte, allege that Cook misrepresented her primary residences to secure favorable mortgage terms in 2021. Pulte referred the case to the Department of Justice, though the claims have yet to be substantiated. Cook has not publicly responded to the allegations as of the time of removal [1][2].

The removal of Cook has had immediate market implications, with the U.S. dollar weakening against major currencies. The Bloomberg Dollar Spot Index dropped 0.2% in early Asian trading following the news. Analysts suggest that Trump’s move could result in a more dovish Federal Reserve, as the president has repeatedly pushed for rate cuts that the current board has resisted. “Cook’s removal is dollar negative as it would create another opening for President Trump to appoint a new Governor who may be more inclined to support interest rate cuts,” said Carol Kong, a strategist at Commonwealth Bank of Australia. The move has raised broader concerns about the independence of the Federal Open Market Committee (FOMC), which has long been a cornerstone of the Fed’s credibility [4].

The political and economic ramifications of this action extend beyond the dollar. Simon Dixon, a financial commentator, argues that the Fed’s independence is now under significant scrutiny, particularly as global economic alliances are shifting. The tension between the U.S. and Europe over monetary and fiscal policy is intensifying amid broader macroeconomic changes. Dixon’s remarks reflect growing concerns that the Fed’s autonomy could be compromised if Trump continues to push for personnel changes aligned with his economic agenda [6].

Meanwhile, the cryptocurrency market has reacted to the Fed-related developments. Bitcoin, which had surged to a peak of $117,000 on August 22, has since retreated to the $114,000 zone. Analysts note that BTC is facing key support levels at $112,000, with further downside risk if the price breaks below that threshold. The $108,000–$109,000 level is now considered a critical zone for the asset. In contrast, Ethereum has experienced a bullish rally, with ETH reaching a new all-time high above $4,800. This divergence is attributed to a shift in investor sentiment, with capital rotating from BTC to altcoins like ETH. Standard Chartered has raised its 2025 ETH price target to $7,500, and some analysts project ETH could reach $25,000 by 2028 [3].

The broader cryptocurrency ecosystem is also being affected by these developments. Ethereum’s recent performance has been supported by ETF inflows and growing institutional adoption. Corporate treasuries, including those of BitMine, SharpLink, and BTCS, have added over $1.6 billion in ETH over the past month. This institutional interest has contributed to a bullish narrative for ETH, with technical indicators showing potential for a continuation of the upward trend. Meanwhile, Bitcoin’s market dominance has slipped below 60% for the first time in four months, signaling a shift in market dynamics. The drop in BTC’s dominance suggests that investors are increasingly favoring altcoins, particularly those with strong fundamentals and regulatory clarity [3].

The removal of Lisa Cook has also created uncertainty in the DeFi sector. Aave, a prominent DeFi platform, experienced a 10% price drop after rumors circulated about a token allocation deal with World Liberty Financial (WLFI), a DeFi project linked to Trump associates. While WLFI denied the claims, the market reacted swiftly, highlighting the sensitivity of crypto markets to political and regulatory developments. As the Fed’s future direction remains uncertain, investors are closely monitoring how the new appointee, expected to be aligned with Trump’s agenda, might shape monetary policy and its impact on both traditional and digital asset markets [3].

Source: [1] Donald Trump moves to fire Fed governor Lisa Cook (https://www.theguardian.com/business/2025/aug/25/trump-fires-federal-reserve-governor-lisa-cook) [2] Trump fires Fed Governor Lisa Cook, opening new front in ... (https://abc7chicago.com/post/president-donald-trump-fires-federal-reserve-governor-lisa-cook-opening-new-front-fight-control-central-bank/17647658/) [3] Best Crypto To Buy Now As Fed Rate Cut Hint Fuels ETH ... (https://99bitcoins.com/news/altcoins/livewith-eth-pumping-and-btc-maintaining-whats-the-best-crypto-to-buy-now/) [4] Dollar Falls With Treasuries as Trump Seeks to Oust Fed ... (https://www.bloomberg.com/news/articles/2025-08-26/dollar-falls-with-treasuries-as-trump-seeks-to-oust-fed-s-cook) [5] USD/CAD trades cautiously around 1.3850 as Trump fires ... (https://www.fxstreet.com/news/usd-cad-trades-cautiously-around-13850-as-trump-fires-feds-cook-202508260540) [6] Simon Dixon asserts Fed independence under scrutiny ... (https://tradersunion.com/news/market-voices/show/458896-fed-independence-scrutiny/)