The U.S. Federal Reserve’s independence has hit the headlines again this week after Chair Jerome Powell publicly criticized political pressure from President Donald Trump.
According to analysts, the recent Department of Justice (DoJ) probe into Powell could ultimately benefit safe havens such as gold and emerging alternatives like Bitcoin [BTC].
Fed’s Powell pushback
For Powell, the investigation into the Federal Reserve buildings’ renovations was a “pretext.” According to him, Trump was after him for failing to cut interest rates aggressively to suit the President’s demands.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
He vowed to fight back against what he perceived as “intimidation” against the central bank. He added,
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”
Fed’s crisis and impact on BTC
Following Powell’s statement, BTC surged immediately from $90.5k to over $91k, while the U.S. dollar index (DXY) slipped slightly.
According to analysts at Presto Research, a “compromised Fed independence” would fuel demand for alternative safe havens.
In April 2025, Trump threatened to dismiss Powell, and BTC rallied while U.S. equities sold off. Similar reports later in 2025 triggered the same market reactions, which reinforced BTC as a “safe haven” asset, much like gold.
With the Fed-Trump tussle culminating in a formal investigation of Powell in 2026, analysts believe that past trends will likely repeat themselves.
In an email statement to AMBCrypto, Eliézer Ndinga, Global Head of Research at 21Shares, said,
“Recent remarks from Jerome Powell on the importance of maintaining central bank independence highlight how essential trust and transparency are to modern monetary policy.”
He added,
“In that context, Bitcoin continues to evolve as an emerging store of value with attributes that complement rather than compete with traditional financial systems.”
On his part, Farzam Ehsani, CEO of cryptocurrency exchange VALR, told AMBCrypto that the escalating White House-Fed conflict was a “concerning precedent.”
He called for caution in the coming weeks, noting that,
“Investors should exercise extreme caution in the coming weeks. The crypto market could react sharply to the outcome of the conflict. “
But if the White House wins, it could fuel a massive BTC rally, Ehsani added.
“If the Fed holds firm, the market could return to its fundamental scenario. If the White House is able to push through a rate cut and launches stimulus measures, Bitcoin and gold could surge higher.”
Final Thoughts
- Regardless of the outcome of the Fed-Trump conflict, analysts believe it would benefit BTC as a ‘safe haven.’
- In 2025, a similar escalation fueled a gold rally and alternative stores of value such as BTC and silver.
