Bitcoin Surges as Dollar Plummets Amid Fed Uncertainty

Bitcoin Rallies Amid Dollar Weakness

Bitcoin surged on Monday, reaching its highest level since April 2, as the US dollar slumped to a three-year low. The cryptocurrency gained 3.23.6% to $87,275.7 by 3:34 ET p.m., regaining most of its losses since President Donald Trump’s announcement of reciprocal tariffs on April 2. The rally was fueled by growing concerns over the Federal Reserve’s independence after Trump hinted at firing Fed Chair Jerome Powell.

Dollar Drops on Fed Shake-Up Fears

The US Dollar Index plummeted to its lowest level since March 2022 amid fears of political interference in monetary policy. White House economic advisor Kevin Hassett revealed that Trump and his team were exploring the legality of removing Powell. Trump also called for the Fed to cut interest rates, further undermining confidence in the dollar. As the dollar weakened, investors sought alternative assets like Bitcoin and gold to preserve purchasing power.

Bitcoin as a Hedge Against Currency Debasement

Bitcoin, often viewed as a hedge against currency devaluation, benefited from the dollar’s decline. The cryptocurrency is seen as a safe haven amid political instability and waning confidence in traditional fiat currencies. Gold prices also hit record highs, reinforcing the appeal of alternative assets.

Trade Developments Boost Crypto Sentiment

The cryptocurrency market received additional support from signs of potential tariff negotiations with major trading partners, including Japan and China. Trump reported “big progress” after a meeting with a Japanese trade delegation, while China indicated openness to trade talks, albeit with conditions. These developments eased trade tensions and bolstered investor sentiment.

Altcoins Join the Rally

Altcoins largely followed Bitcoin’s upward trajectory. Ethereum rose 3.4% to $1,578.43, while XRP gained 0.4% to $2.09. Solana dipped 0.4%, but Cardano and Polygon saw increases of 0.7% and 5.2%, respectively. Meme tokens also participated, with Dogecoin up 2.3% and the $TRUMP token rising 1.3%.

The cryptocurrency market’s gains reflect a broader shift toward alternative assets as investors navigate economic uncertainty and geopolitical tensions.