Bitcoin Jumps to $87K as Trump Threatens to Fire Fed Chair Powell

Bitcoin (BTC) surged past $87,000 on Monday, climbing over 2% amid growing political uncertainty surrounding the Federal Reserve. The rally came as the U.S. dollar index dropped to a three-year low following reports that former President Donald Trump is exploring ways to remove Fed Chairman Jerome Powell. BTC's price broke out of its recent consolidation range between $83,000 and $87,000, marking its highest level since April 2, according to CoinDesk.

Altcoins such as Ethereum (ETH), XRP, and Cardano (ADA) followed BTC’s lead with gains over 1%, though they lagged behind Bitcoin's momentum. The move reflects a broader market shift driven by the weakening dollar and increasing appetite for alternative assets.

The U.S. Dollar Index (DXY) slid to 98.5, its lowest since April 2022, pressured by hedge fund selling across major currencies including the euro, yen, and Australian dollar. The index has dropped 10% over the past three months. Dollar weakness often fuels risk-on sentiment, benefiting cryptocurrencies and precious metals.

Gold also rallied, reaching a record high of $3,382 per ounce, extending its year-to-date gains to 28%. Meanwhile, U.S. stock futures dipped, with the S&P 500 and Nasdaq futures down 0.5%.

Market analysts attribute the sharp sell-off in the dollar and rise in BTC and gold to Trump’s public criticism of Powell. Trump recently posted that “Powell’s termination cannot come fast enough” and renewed calls for rate cuts, sparking fears over the Fed’s independence. National Economic Council Director Kevin Hassett’s confirmation of Trump's intentions added fuel to the market reaction.

Chicago Fed President Austan Goolsbee warned that removing Powell would damage the central bank's credibility, underscoring growing concern among policymakers.