Dollar Drops, Bitcoin Hits $87K as Markets React to Fed Turmoil
Global markets opened the week on edge as political pressure on the U.S. Federal Reserve sparked a sharp move out of the dollar and into alternative assets. Bitcoin (BTC) led the charge, climbing above $87,000 for the first time in nearly three weeks.
The rally came amid growing speculation that President Donald Trump is exploring options to remove Fed Chair Jerome Powell — a move that analysts warn could undermine the central bank’s independence. The resulting uncertainty rattled currency markets, pushing the U.S. dollar index (DXY) down to 98.5, a level not seen since April 2022.
BTC rose more than 2% to $87,200, according to CoinDesk, breaking decisively out of its recent $83K–$87K range. Other top digital assets like Ethereum (ETH), XRP, and Cardano (ADA) saw modest gains of around 1%, trailing behind Bitcoin’s momentum.
“The combination of political pressure on the Fed and dollar weakness has reignited demand for hard assets,” said Markus Thielen, founder of 10x Research. “Bitcoin and gold are responding to the same macro impulse — a loss of faith in fiat stability.”
Gold prices surged to a new all-time high of $3,382 per ounce, extending their year-to-date gains to 28%. In contrast, U.S. equity futures dipped, with both the S&P 500 and Nasdaq contracts down around 0.5% in early trading.
The catalyst for the market shake-up appears to be comments made Friday by National Economic Council Director Kevin Hassett, who confirmed that Trump is evaluating legal avenues to dismiss Powell. Trump has been increasingly vocal on social media, stating that “Powell’s termination cannot come fast enough,” while doubling down on calls for immediate rate cuts.
Powell, in recent remarks, reiterated that the Fed remains in wait-and-see mode, citing elevated inflation risks and potential stagflation. Chicago Fed President Austan Goolsbee responded by cautioning that any attempt to remove Powell could do long-term damage to the central bank’s credibility.
With political drama escalating and the dollar under pressure, investors appear to be rotating into assets perceived as resistant to monetary manipulation — and Bitcoin is once again at the center of that rotation.
