Bitcoin Rises As Powell Faces Political Pressure

Jerome Powell, chairman of the Federal Reserve, is the subject of a criminal investigation. The information, confirmed on Sunday, comes amid strong political tensions in the United States. It raises questions about the independence of the central bank from the executive power. Beyond Wall Street, this case also resonates in the crypto market. In a climate of institutional distrust, bitcoin regains its place at the heart of the debate as a non-sovereign asset.

An unprecedented and politically explosive investigation

Last Sunday, Jerome Powell confirmed he is targeted by a criminal investigation, opened following his testimony before a Senate committee concerning renovation work carried out within the Federal Reserve buildings, while the institution continues to warn about liquidity tensions.

In a public statement, the Fed chairman defended his integrity. He asserted that this judicial process is “a consequence of the Federal Reserve setting interest rates based on our best assessment of what serves the public, rather than following the President’s preferences.”

This statement clearly targets Donald Trump who strongly criticized Powell for not obeying his repeated calls to cut key interest rates.

This case reveals an unprecedented institutional tension in the United States, in which the independence of monetary policy seems challenged by direct political interests. At this stage, little information has leaked about the precise motives of the investigation, but analysts agree on a series of potential short-term effects :

• A loss of institutional credibility for the Federal Reserve if the case drags on or proves politically motivated ;

• An increase in volatility in traditional financial markets, with a possible systemic correction of U.S. stocks ;

• A renewed concern about the separation of powers between the executive and monetary authority ;

• Increased pressure on the Fed, potentially affecting its upcoming monetary policy decisions, notably on rates.

Bitcoin, a safe haven in a degraded institutional climate ?

If stock markets waver, bitcoin seems to benefit from this instability. According to analysts from the Bitunix platform, “when the credibility of the dollar and the independence of central banks are questioned, decentralized assets tend to receive a narrative risk premium.”

In other words, this crisis of confidence could strengthen the value proposition of bitcoin as a non-sovereign asset, free from political influence. In the 24 hours following the announcement, BTC gained slightly by 0.85 %, while privacy-focused tokens like Monero (+18 %) and Zcash (+6.5 %) recorded stronger increases.

Analyst Will Clemente summarized the situation in a post on X : “this is precisely the kind of context for which bitcoin was created”. He highlights the confluence of several factors: a presidential attack against the Fed chairman, rising demand for precious metals as an alternative store of value, and escalating geopolitical tensions. For many observers, these conditions revive interest in censorship-resistant assets independent of any central authority.

Despite this momentum, market signals do not all point to an immediate rise in bitcoin. According to Nansen data, savvy investors maintain a net short position of 127 million dollars on the asset, with 1.6 million dollars of new short positions added in just 24 hours.

Conversely, these same investors show a long exposure on Ether (674M$) and XRP (72M$). This allocation suggests that, while the narrative around bitcoin as a safe haven gains credibility, the market seems to favor other cryptos for diversification or short-term hedging logic, rather than anticipating an immediate BTC rally.

The power law model predicts a major test for bitcoin. In a climate where the authority of central banks wavers, the digital asset could redefine its place vis-à-vis traditional markets. It remains to be seen whether this institutional crisis will be enough to turn a narrative into a true catalyst for change.