{"id":5512,"date":"2026-01-12T11:39:44","date_gmt":"2026-01-12T11:39:44","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=5512"},"modified":"2026-01-12T11:39:44","modified_gmt":"2026-01-12T11:39:44","slug":"bitcoin-dances-to-the-beat-of-trump-and-powells-political-drama","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=5512","title":{"rendered":"Bitcoin dances to the beat of Trump and Powell&#8217;s political drama"},"content":{"rendered":"<p><\/p>\n<div>\n<p>Bitcoin opened the year trading like it usually does when macro uncertainty rises: it moved with the tide of rates, the dollar, and risk appetite, even as investors tried to pin a more specific narrative on top.<\/p>\n<p>However, this week the narrative shifted from \u201cwhat will the central bank do?\u201d to \u201ccan the central bank still do it without coercion?\u201d<\/p>\n<p>That shift followed a sharp escalation in the clash between President Donald Trump and Federal Reserve Chair Jerome Powell.<\/p>\n<p>Powell said the Justice Department served the Federal Reserve with grand jury subpoenas and threatened him with criminal indictment over his congressional testimony on a roughly $2.5 billion renovation of the Fed\u2019s Washington buildings.<\/p>\n<p>The White House has denied wrongdoing, and Trump has denied involvement, but markets don\u2019t need a courtroom outcome to reprice risk.<\/p>\n<p>In the first broad market response, investors leaned into what traders often reach for when policy credibility looks shakier: gold surged to a fresh record near $4,600 per ounce, the dollar slipped, and US stock futures fell.<\/p>\n<p>Bitcoin rose with the \u201ccredibility hedge\u201d complex, then retraced, even as broader risk markets wobbled, reflecting why the Trump\u2013Powell fight is becoming a real trade rather than political background noise.<\/p>\n<div class=\"cs-article-embed\">\n<div class=\"cs-article-embed__media\"> <img loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/bitcoin-silver--1024x538.jpg\" alt=\"The Bitcoin \u201chard asset\u201d narrative is breaking as silver hits parabolic peaks without taking crypto along for the ride\" loading=\"lazy\" decoding=\"async\"\/><img loading=\"lazy\" class=\"lazyload\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/bitcoin-silver--1024x538.jpg\" alt=\"The Bitcoin \u201chard asset\u201d narrative is breaking as silver hits parabolic peaks without taking crypto along for the ride\" loading=\"lazy\" decoding=\"async\"\/><\/div>\n<div class=\"cs-article-embed__body\"> <span class=\"cs-article-embed__related-reading\">Related Reading<\/span><\/p>\n<h3 class=\"cs-article-embed__title\">The Bitcoin \u201chard asset\u201d narrative is breaking as silver hits parabolic peaks without taking crypto along for the ride<\/h3>\n<p class=\"cs-article-embed__summary\">Silver hit $72 on industrial demand and safe-haven flows while Bitcoin remained stuck, and the divergence tells what narrative the market is buying.<\/p>\n<p> <span class=\"cs-article-embed__meta-item\">Dec 25, 2025<\/span> <span class=\"cs-article-embed__meta-divider\">\u00b7<\/span> <span class=\"cs-article-embed__meta-item\">Gino Matos<\/span><\/p>\n<\/div><\/div>\n<h2>Markets start pricing \u201cFed independence\u201d as a risk factor<\/h2>\n<p>Powell said the threat of criminal charges was \u201ca consequence\u201d of the Fed setting interest rates based on its best assessment of what serves the public, rather than \u201cfollowing the preferences of the President.\u201d<\/p>\n<p>He also framed the confrontation as a test of whether US monetary policy will be directed by evidence or by intimidation.<\/p>\n<p>That is the kind of language markets recognize. Central bank independence is not a symbolic nicety in the investor playbook; it\u2019s the mechanism that helps anchor long-term inflation expectations and keeps the pricing of money from looking like a political instrument.<\/p>\n<p>The Fed itself describes its structure as \u201cindependent within the government,\u201d accountable to Congress and the public while operating without day-to-day political control over its tools.<\/p>\n<p>When that premise looks threatened, investors tend to demand a premium for holding assets whose value depends on the credibility of long-run policy. That premium can show up in foreign exchange, in longer-dated bond yields, and in the appetite for stores of value.<\/p>\n<p>Bitcoin sits awkwardly in that mix because it is both a risk asset and, at times, a credibility hedge. It can rise on easier financial conditions and fall when volatility forces deleveraging. And because it is now heavily financialized through derivatives and regulated products, its short-term path often reflects plumbing and positioning as much as ideology.<\/p>\n<p>On Monday, BTC was last trading around $90,500 after a brief jump to $92,000, according to <em>CryptoSlate<\/em> data, after a day in which it was reported higher alongside gold as the dispute deepened.<\/p>\n<div class=\"cs-coin-shortcode cs-coin-card\" role=\"group\" aria-label=\"Bitcoin market data\">\n<div class=\"cs-coin-card__metrics\">\n<p> <span class=\"cs-coin-card__label\">Market Cap<\/span> <span class=\"cs-coin-card__metric-value\"> $1.81T <\/span><\/p>\n<p> <span class=\"cs-coin-card__label\">24h Volume<\/span> <span class=\"cs-coin-card__metric-value\"> $30.52B <\/span><\/p>\n<p> <span class=\"cs-coin-card__label\">All-Time High<\/span> <span class=\"cs-coin-card__metric-value\"> $126,173.18 <\/span><\/p>\n<\/div>\n<\/div>\n<p>This direction was modest compared with gold, but the association matters: it suggests investors are at least considering bitcoin as part of a broader \u201cpolicy credibility\u201d basket, not purely as a tech-driven trade.<\/p>\n<h2>Two channels into Bitcoin: liquidity vs. credibility<\/h2>\n<p>There are two distinct ways the Trump\u2013Powell conflict can hit Bitcoin, and they can push in opposite directions.<\/p>\n<ol>\n<li>First is the liquidity channel. If investors conclude that political pressure increases the odds of rate cuts arriving sooner, or arriving more aggressively, the typical sequence is lower short-term yields, a softer dollar, and looser financial conditions.Bitcoin has historically responded well to that setup because it trades less like a cash-flow asset and more like a duration-sensitive bet on marginal liquidity. When the discount rate falls and risk appetite expands, crypto tends to catch a bid.\n<p>This is the optimistic read: the fight becomes shorthand for \u201ceasier money ahead,\u201d and BTC benefits from the same impulse that lifts other liquidity-sensitive assets.<\/p>\n<\/li>\n<li>Second is the credibility channel, which is messier. If markets interpret subpoenas and threats of indictment as a genuine attempt to subordinate the Fed to politics, the result can be a credibility shock.In that world, investors may demand extra compensation to hold long-dated dollar assets, a dynamic that can lift the term premium even if the Fed eventually cuts rates.\n<p>The fear here is not simply that policy becomes easier, but that it becomes less predictable and that inflation expectations become less anchored.<\/p>\n<\/li>\n<\/ol>\n<div class=\"cs-article-embed\">\n<div class=\"cs-article-embed__media\"> <img loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/11\/bitcoin-fed-ratecut-1024x538.jpg\" alt=\"Rate cut odds spike to 70%: But are Bitcoin traders ready to buy?\" loading=\"lazy\" decoding=\"async\"\/><img loading=\"lazy\" class=\"lazyload\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/11\/bitcoin-fed-ratecut-1024x538.jpg\" alt=\"Rate cut odds spike to 70%: But are Bitcoin traders ready to buy?\" loading=\"lazy\" decoding=\"async\"\/><\/div>\n<div class=\"cs-article-embed__body\"> <span class=\"cs-article-embed__related-reading\">Related Reading<\/span><\/p>\n<h3 class=\"cs-article-embed__title\">Rate cut odds spike to 70%: But are Bitcoin traders ready to buy?<\/h3>\n<p class=\"cs-article-embed__summary\">The question now is whether a December cut carries enough conviction to pull Bitcoin (BTC) out of protection mode.<\/p>\n<p> <span class=\"cs-article-embed__meta-item\">Nov 22, 2025<\/span> <span class=\"cs-article-embed__meta-divider\">\u00b7<\/span> <span class=\"cs-article-embed__meta-item\">Gino Matos<\/span><\/p>\n<\/div><\/div>\n<p>Bitcoin\u2019s behavior around credibility shocks is often two-phased.<\/p>\n<ul>\n<li>Phase one is risk-off. When volatility spikes, correlations tend to jump. Leverage comes out of the system. High-volatility assets can sell off alongside equities, even if the longer-term narrative eventually turns supportive.<\/li>\n<li>Phase two is narrative-driven demand. If the credibility concern persists, BTC can begin to trade more like \u201calt-gold,\u201d attracting interest from investors looking for exposure to assets perceived as outside the traditional monetary order.<\/li>\n<\/ul>\n<p>Early market performance hinted at the second phase in the background: gold hit new highs, the dollar weakened, and the flagship crypto traded higher even as risk sentiment softened.<\/p>\n<p>Notably, that doesn\u2019t eliminate the chance of a phase-one drawdown if markets seize up, but it explains why BTC can rise on the same day as equity futures fall.<\/p>\n<h2>The calendar is the catalyst, not the commentary<\/h2>\n<p>For traders trying to turn this from a narrative into a risk-managed view, the most important detail is that the story has a clock.<\/p>\n<div class=\"code-block code-block-5\" style=\"margin: 8px 0; clear: both;\">\n<div class=\"placement desktop us-deny-hide hidden\" style=\"max-height: 107px\">  <img fetchpriority=\"high\" width=\"1456\" height=\"180\" decoding=\"async\" style=\"display: block; width: 728px; max-height: 90px; max-width: 100%; margin: auto; height: 90px;\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/11\/bc_game168_Sposorship_1456x180.gif\" alt=\"BC Game\"\/><img class=\"lazyload\" width=\"1456\" height=\"180\" decoding=\"async\" style=\"display: block; width: 728px; max-height: 90px; max-width: 100%; margin: auto; height: 90px;\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/11\/bc_game168_Sposorship_1456x180.gif\" alt=\"BC Game\"\/> <\/div>\n<\/div>\n<p>The first waypoint is the next Federal Open Market Committee meeting on Jan. 27\u201328.<\/p>\n<p>Even if the Fed holds rates steady, the meeting could still reprice markets through tone and guidance, as well as how Powell handles questions about legal threats and political pressure. Monetary policy is not only the decision; it is also the institution\u2019s perceived ability to make decisions without coercion.<\/p>\n<p>The second waypoint is May 2026, when Powell\u2019s term as chair is scheduled to end.<\/p>\n<p>That matters because it gives markets a date around which \u201csuccession risk\u201d can be repriced. Investors don\u2019t need a nomination to trade the probability of one, and they don\u2019t need a confirmed successor to begin modeling what a more politically aligned chair could mean for the expected path of rates.<\/p>\n<div class=\"cs-article-embed\">\n<div class=\"cs-article-embed__media\"> <img loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/Kevin-Hassett-coinbase-1024x538.jpg\" alt=\"New front runner for Fed chair is pro-crypto \u2013 violent dollar collapse needed for Bitcoin to rally\" loading=\"lazy\" decoding=\"async\"\/><img loading=\"lazy\" class=\"lazyload\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/Kevin-Hassett-coinbase-1024x538.jpg\" alt=\"New front runner for Fed chair is pro-crypto \u2013 violent dollar collapse needed for Bitcoin to rally\" loading=\"lazy\" decoding=\"async\"\/><\/div>\n<div class=\"cs-article-embed__body\"> <span class=\"cs-article-embed__related-reading\">Related Reading<\/span><\/p>\n<h3 class=\"cs-article-embed__title\">New front runner for Fed chair is pro-crypto \u2013 violent dollar collapse needed for Bitcoin to rally<\/h3>\n<p class=\"cs-article-embed__summary\">Bitcoin investors celebrating the $93,000 rebound may be ignoring a critical \u201csequencing\u201d risk tied to liquidity.<\/p>\n<p> <span class=\"cs-article-embed__meta-item\">Dec 3, 2025<\/span> <span class=\"cs-article-embed__meta-divider\">\u00b7<\/span> <span class=\"cs-article-embed__meta-item\">Liam &#8216;Akiba&#8217; Wright<\/span><\/p>\n<\/div><\/div>\n<p>This calendar effect is why the Trump\u2013Powell feud can matter even if nothing changes in Fed policy tomorrow.<\/p>\n<p>The market can front-run probabilities. If investors think the institutional constraints around the Fed are weakening, they can price it into the dollar, longer-dated yields, and assets that tend to benefit when policy credibility is questioned.<\/p>\n<p>That dynamic is also why the most bullish near-term interpretation can carry the seeds of future volatility. A world where the front end reprices quickly toward easier money can be positive for Bitcoin in the short run.<\/p>\n<p>But if the same world also raises questions about the long-run inflation regime, the resulting volatility can hammer risk assets before any \u201ccredibility hedge\u201d narrative fully takes hold.<\/p>\n<h2>ETF plumbing can amplify, not just reflect, the macro move<\/h2>\n<p>Even when the macro narrative is clear, Bitcoin\u2019s realized path often depends on where capital is actually flowing.<\/p>\n<p>Spot Bitcoin ETFs have become the market\u2019s most visible transmission mechanism from \u201cinstitutional mood\u201d into price action. They can also turn macro volatility into mechanical buying or selling, especially when moves are sharp enough to trigger risk controls, rebalancing, or hedging.<\/p>\n<p>The first week of 2026 offered a live demonstration of how quickly the tape can flip. The US spot Bitcoin ETFs showed periods in which flows reversed sharply after an initially strong start to the year. This illustrates how quickly investor conviction can fade when volatility rises.<\/p>\n<p>In a politically volatile environment, those vehicles can act as accelerants. Outflows can become forced selling into drawdowns, and inflows can turbocharge breakouts when the narrative shifts back toward \u201ccuts plus liquidity.\u201d<\/p>\n<p>This matters for interpreting Bitcoin\u2019s initial reaction to the Trump\u2013Powell shock. A one-day rise alongside gold and a weaker dollar can signal that the \u201ccredibility hedge\u201d narrative is gaining traction.<\/p>\n<p>However, if the same macro shock produces sustained ETF outflows, the market can still slide even if the longer-term story sounds supportive.<\/p>\n<div class=\"cs-article-embed\">\n<div class=\"cs-article-embed__media\"> <img loading=\"lazy\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/01\/bitcoin-etf-outflow--1024x538.jpg\" alt=\"Bitcoin critical demand metric turns negative and ETFs wiped out $1.1 billion in 72 hours\" loading=\"lazy\" decoding=\"async\"\/><img loading=\"lazy\" class=\"lazyload\" width=\"1024\" height=\"538\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/01\/bitcoin-etf-outflow--1024x538.jpg\" alt=\"Bitcoin critical demand metric turns negative and ETFs wiped out $1.1 billion in 72 hours\" loading=\"lazy\" decoding=\"async\"\/><\/div>\n<div class=\"cs-article-embed__body\"> <span class=\"cs-article-embed__related-reading\">Related Reading<\/span><\/p>\n<h3 class=\"cs-article-embed__title\">Bitcoin critical demand metric turns negative and ETFs wiped out $1.1 billion in 72 hours<\/h3>\n<p class=\"cs-article-embed__summary\">Bitcoin ETFs face record outflows amidst macroeconomic headwinds and dwindling demand.<\/p>\n<p> <span class=\"cs-article-embed__meta-item\">Jan 9, 2026<\/span> <span class=\"cs-article-embed__meta-divider\">\u00b7<\/span> <span class=\"cs-article-embed__meta-item\">Oluwapelumi Adejumo<\/span><\/p>\n<\/div><\/div>\n<h2>What this means for Bitcoin\u2019s next leg<\/h2>\n<p>The immediate question is not whether Trump and Powell will keep fighting but\u00a0whether investors treat this fiasco as theater or as a structural change in how US monetary power is governed.<\/p>\n<p>If it stays theater, BTC remains mostly a rates-and-liquidity trade into the Jan. 27\u201328 meeting, with price driven by data, guidance, and whether the mid-2026 cut path gets pulled forward.<\/p>\n<p>However, if it starts to look structural, Bitcoin moves into a rarer regime: part risk asset, part credibility hedge.<\/p>\n<p>In that regime, the market is more likely to oscillate between phase-one de-risking and phase-two \u201calt-gold\u201d demand, with ETF plumbing amplifying whichever impulse dominates.<\/p>\n<p>Either way, the macro spine is now unmistakable. Bitcoin is no longer only reacting to what the Fed decides. It is starting to react to whether the Fed is still perceived as able to decide.<\/p>\n<div class=\"post-bottom\">\n<div class=\"post-mentions\"> <span class=\"heading\">Mentioned in this article<\/span><\/div>\n<\/div>\n<\/div>\n<p>Analysis,Featured,Macro,Market,Politics,Trading,bitcoin,powell,trumpbitcoin,powell,trump#Bitcoin #dances #beat #Trump #Powells #political #drama1768217984<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin opened the year trading like it usually does when macro uncertainty rises: it moved with the tide of rates, the dollar, and risk appetite, even as investors tried to pin a more specific narrative on top. However, this week the narrative shifted from \u201cwhat will the central bank do?\u201d to \u201ccan the central bank<\/p>\n","protected":false},"author":1,"featured_media":5513,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[1123,91,1122,1125,764,1121,1124,283],"class_list":{"0":"post-5512","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ethereum","8":"tag-beat","9":"tag-bitcoin","10":"tag-dances","11":"tag-drama","12":"tag-political","13":"tag-powell","14":"tag-powells","15":"tag-trump"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.6 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bitcoin dances to the beat of Trump and Powell&#039;s political drama - Crypto News: Latest Cryptocurrency News and Analysis<\/title>\n<meta name=\"description\" content=\"Bitcoin gains alongside gold as the Trump-Powell saga raises doubts about future monetary independence of the Fed Reserve.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptonews.uk.com\/?p=5512\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bitcoin dances to the beat of Trump and Powell&#039;s political drama\" \/>\n<meta property=\"og:description\" content=\"Bitcoin gains alongside gold as the Trump-Powell saga raises doubts about future monetary independence of the Fed Reserve.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptonews.uk.com\/?p=5512\" \/>\n<meta property=\"og:site_name\" content=\"Crypto News: Latest Cryptocurrency News and Analysis\" \/>\n<meta property=\"article:published_time\" content=\"2026-01-12T11:39:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptonews.uk.com\/wp-content\/uploads\/2026\/01\/fed-politics-bitcoin.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"\u884c\u653f\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"\u884c\u653f\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"8 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/cryptonews.uk.com\/?p=5512\",\"url\":\"https:\/\/cryptonews.uk.com\/?p=5512\",\"name\":\"Bitcoin dances to the beat of Trump and Powell's political drama - Crypto News: Latest Cryptocurrency News and Analysis\",\"isPartOf\":{\"@id\":\"https:\/\/cryptonews.uk.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/cryptonews.uk.com\/?p=5512#primaryimage\"},\"image\":{\"@id\":\"https:\/\/cryptonews.uk.com\/?p=5512#primaryimage\"},\"thumbnailUrl\":\"https:\/\/cryptonews.uk.com\/wp-content\/uploads\/2026\/01\/fed-politics-bitcoin.jpg\",\"datePublished\":\"2026-01-12T11:39:44+00:00\",\"author\":{\"@id\":\"https:\/\/cryptonews.uk.com\/#\/schema\/person\/822778c5844e0d16d43dce6630f4f1bf\"},\"description\":\"Bitcoin gains alongside gold as the Trump-Powell saga raises doubts about future monetary independence of the Fed Reserve.\",\"breadcrumb\":{\"@id\":\"https:\/\/cryptonews.uk.com\/?p=5512#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/cryptonews.uk.com\/?p=5512\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/cryptonews.uk.com\/?p=5512#primaryimage\",\"url\":\"https:\/\/cryptonews.uk.com\/wp-content\/uploads\/2026\/01\/fed-politics-bitcoin.jpg\",\"contentUrl\":\"https:\/\/cryptonews.uk.com\/wp-content\/uploads\/2026\/01\/fed-politics-bitcoin.jpg\",\"width\":1200,\"height\":630},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/cryptonews.uk.com\/?p=5512#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/cryptonews.uk.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Bitcoin dances to the beat of Trump and Powell&#8217;s political drama\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/cryptonews.uk.com\/#website\",\"url\":\"https:\/\/cryptonews.uk.com\/\",\"name\":\"Crypto News: Latest Cryptocurrency News and Analysis\",\"description\":\"Latest Crypto &amp; 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