Political Storm Heats Up: Trump and Powell Clash Boost Bitcoin, Privacy Coins Become New Safe Havens

On Sunday, the US political storm continued to escalate, with tensions between Federal Reserve Chair Powell and President Trump intensifying, prompting a rebound in the crypto markets. Bitcoin broke through $92,000, Ethereum moved in tandem, and the privacy coin sector performed the best. The market is re-pricing the risks brought by political uncertainty, with safe-haven funds accelerating rotation, viewing crypto assets as an important tool to hedge against systemic risks.

Escalation of Political Conflict, Federal Reserve Independence in Focus

According to the latest news, Powell revealed in an interview that the Federal Reserve is facing a criminal investigation threat from the Department of Justice, due to its refusal to comply with Trump’s demand for rate cuts. This is the first time the Fed Chair has openly spoken about political pressure so candidly.

Event Timeline

• Powell states the Department of Justice threatens the Fed with criminal charges
• Powell responds via video, implying investigation details may have been leaked
• Trump denies involvement in DOJ actions but reiterates that Powell’s performance on interest rate decisions is poor
• Trump emphasizes that the real pressure comes from the objective fact of high interest rates

Core Dispute

Trump has repeatedly pressured the Fed to cut rates faster and more aggressively to stimulate economic growth. Meanwhile, Powell insists on the Fed’s independence in rate decisions and will not change policy direction due to administrative pressure. This confrontation is especially sensitive given that Powell’s term ends in May 2026.

Market Reaction: Safe-Haven Funds Accelerate Rotation

Bitcoin’s price movement almost synchronized with Powell’s statements, which is no coincidence but a result of the market re-pricing political risks.

Specific Market Performance

Bitcoin is currently priced at $92,039.22, up 1.50% in 24 hours. Mainstream blockchain assets like Ethereum are also strengthening, but what’s more noteworthy is the outstanding performance of privacy coins. Monero and Zcash experienced significant surges in a short period, reflecting renewed market concerns over financial system uncertainties.

Why Privacy Coins Are Becoming the Focus of Capital Chase

The strength of privacy coins has deep logic behind it. When markets doubt the stability of the financial system and politics, privacy coins represent a new demand for financial privacy and asset security. Against the backdrop of questions about the Fed’s independence, investors are reassessing risks in traditional financial systems, and privacy coins offer an alternative store of value.

Meanwhile, gold prices also rose noticeably during the same period, further confirming that markets are seeking assets to hedge political and systemic risks. The simultaneous rise of Bitcoin, gold, and privacy coins indicates that safe-haven funds are flowing out of traditional financial systems, seeking more defensive asset allocations.

Macro Environment and Follow-up Focus

This week, US economic data will be a key trigger for the market. According to the latest news, the focus will be on December CPI data, the Supreme Court’s ruling on Trump’s tariffs case, and the Fed’s Beige Book on economic conditions.

Why These Data Are Important

If CPI data come in below expectations, it could further support rate cut expectations, which is favorable for crypto assets. The Supreme Court’s ruling on tariffs may also influence market assessments of political risks. The Fed’s Beige Book will reflect current economic conditions and provide reference for future policy.

From a liquidity perspective, major investment banks have delayed the first rate cut by the Fed to mid-2026. This suggests that the financial environment may remain accommodative for a longer period. In such an environment, crypto assets tend to benefit first, and the market generally believes this could lay the foundation for a new medium- to long-term rally.

Summary

The escalating conflict between Trump and Powell is becoming a new driver for the crypto market. Political uncertainty, threats to Fed independence, and expectations of loose liquidity—these factors combined are prompting investors to reassess the safe-haven value of crypto assets. Bitcoin breaking through $92,000 and the strength of privacy coins reflect the market’s re-pricing of systemic risks. This week’s CPI data and Supreme Court rulings will be key points to watch, likely further confirming the sustainability of this rally. For market participants, it’s crucial to understand the market logic behind political volatility rather than being misled by short-term fluctuations.