Bitcoin reacted swiftly late Monday after President Donald Trump said he is removing Federal Reserve Governor Lisa D. Cook “effective immediately,” invoking the Federal Reserve Act’s “for cause” clause and citing alleged false statements on 2021 mortgage applications. Cook rejected the move, said she will not resign, and has retained counsel, setting up an unprecedented legal clash over presidential power and Fed independence.
Cook, a Biden appointee, was reconfirmed in 2023 to a term running to January 31, 2038, and—as a member of the Board of Governors—holds a permanent vote on the FOMC. As the headlines hit Asia and Europe overnight, Bitcoin slipped alongside a wobbly dollar and US rates curve. At press time, BTC traded around $110,137, down roughly 2.4% on the session, after an intraday low at $108,666.
How Will Bitcoin React Long-Term?
The legal stakes are enormous. Reuters reports Trump’s letter accuses Cook of “deceitful and potentially criminal conduct in a financial matter,” while legal scholars note that 12 U.S.C. § 242 permits removal “for cause” but does not define the term—and historically such standards hew to misconduct in office rather than pre-appointment personal matters. No president has previously attempted to remove a sitting Fed governor, and a court fight—potentially up to the Supreme Court—appears likely. Cook’s attorney Abbe Lowell called the action unlawful; Cook says she will continue performing her duties.
Market participants immediately mapped the institutional shock to a “hard assets” trade. Macro commentator Mel Mattison wrote on X that he has been “posting about a Coup d’Fed or a Fed Makeover,” adding: “Tonight definitely takes it up a notch. My initial take is that after some dropped jaws close, this will ultimately be bullish equities and massively bullish gold/btc.”
In his view, “short-term, it will introduce a little vol and maybe even a percent or two off the indices this week,” but over the coming months “the board of governors may be stacked with Trump appointees who will deliver MMT-like monetary policy with a conservative twist.”
He added that “other central banks, like the ECB, will be forced to lower rates as well … a race to the bottom in currencies combined with massive fiscal spending will ultimately lead to higher equity prices and gold over $5K by end of ’26,” and that new Bitcoin all-time highs by the end of the week would not surprise him “after blockbuster NVDA earnings on Wednesday and an inline PCE Friday.”
Others framed the moment even more starkly. “And just like that, the President has fired a voting Fed member for the first time in history. The White House has never been this adamant about exerting influence over the US’ central bank. Fiscal dominance accelerates. Weimar beckons,” wrote Joe Consorti, Head of Growth at Bitcoin focused firm Theya, who added separately: “Accelerate Operation Weimar. Long hard assets. Relax and enjoy the ride.”
MacroEdge’s Partner and Chief Economist Don Johnson underscored the policy channel: “We’re running an almost $3 trillion deficit — what do you think happens with a puppet Fed that cuts rates to 1%?”
Beyond Bitcoin, cross-asset price action reflected the shock. In early trading, the dollar index eased and the Treasury curve bear-steepened on fears that the Fed’s perceived independence could erode, with investors reassessing the path for rate cuts; risk assets and gold were volatile.
The attempted removal also intensified the narrative that Trump could soon gain additional seats to reshape the Board; if the action ultimately stands, it would give the White House another nomination to a seven-member body where governors (unlike regional bank presidents) always vote on monetary policy.
What matters for Bitcoin from here is the policy and liquidity regime that markets start to price. A successful test of presidential removal power that leads to a more politicized, easier-money Fed would validate the “fiscal dominance” and “hard-assets” thesis Mattison and Consorti articulate, supporting BTC via real-yield compression and currency-debasement hedging flows.
At press time, BTC traded at $110,273.
Related Posts
