Bitcoin rallied, reaching its highest level since Trump's "Liberation Day" tariff declarations, while the dollar fell due to growing concerns about the US president's attempts to remove Federal Reserve Chairman Jerome Powell.
The value of the leading cryptocurrency rose by roughly 3% to over $87,600 on Monday morning in Singapore, according to Bloomberg. The decline that followed Trump's announcement of reciprocal tariffs on April 2, which caused significant market disruptions, was almost reversed by this recovery.
On Monday, the upward movement coincided with declining dollar values and US stock-index futures, following presidential criticism of the Federal Reserve, which raised concerns about its autonomy. When Kevin Hassett, the director of the National Economic Council, revealed that Trump was looking into his authority to fire Powell, the dollar index dropped to its lowest point since January 2024.
Bitcoin's upward trend paralleled gold's recent record high, indicating that investors are drawn to assets that are typically thought of as stable and resistant to inflation.
"USD weakness is driving the rally in crypto," stated Sean McNulty, APAC's lead for derivatives trading at digital-asset prime brokerage FlanX. He stated that "thin holiday liquidity" in cryptocurrency markets "is causing the move to be exaggerated."
This follows warnings of an imminent US financial crisis and recession that could be worse than 2008 from billionaire Ray Dalio, co-chief investment officer of Bridgewater Associates, the largest hedge fund in the world. The possibility that Trump would fire Federal Reserve Chair Jerome Powell, which would set off a "apocalyptic scenario" for financial markets, has been acknowledged by White House officials.
"The president and his team will continue to study that matter," Kevin Hassett, Trump's economic adviser, told reporters at the White House when asked if firing Powell was an option or if Trump had the authority to do so, according to Forbes.
Trump expressed his impatience on Truth Social this week, stating that "Powell's termination cannot come fast enough" in response to Powell's announcement to maintain current interest rates in the face of uncertainty surrounding Trump's tariff policies.
Last month, Democratic Senator Elizabeth Warren emphasized Trump's potential decision to fire Powell, warning that "nobody is safe."
Trump's widespread implementation of trade tariffs has disrupted established international trade patterns, creating market uncertainty and prompting investors to withdraw from high-risk assets such as cryptocurrencies.
