The cryptocurrency market saw both extraordinary peaks and dramatic drops on Monday, with gold reaching and surpassing the $88,000 mark and settling around $86,800. In the context of a Bitcoin price comeback, this spike—it’s a Bitcoin price comeback since it’s highest price in March—occurs alongside the dollar undergoing a plummet in value due to increasing concern of the public Trump is waging against Fed Chair Powell.
Political Turmoil Forces Dollar per Capita Fall
The cumulative number of United States dollars in circulation, pulverized to the lowest dollar amount in 3 years, dropped lower than the number USD per person in circulation with the advent of Trump constantly berating Powell. The new president took to his social outlet, declarative abuse penning, “Powell’s firing cannot come fast enough.” The strain the president has been piling up on the bank to start using “cheap money” aka pumping in lower interest rates did not help the wheel. Adding to the avoidable Wheel trouble, the Economic Advisor of the White House Kevin Hassett publicly stated that Powells’s removal legality was on the table signifying actively seeking makes such statements fuel the worry machine. Overall, this led to the US dollar loose more value then it has since March 22. This kind market angst in conjunction with Trumpavalanche euro statements drove the US dollar currency market by over vibrantly 3 bucks down which haven’t seen happen since March twenty-two twenty-two.
Bitcoin’s Surge: A Hedge Against Instability?
While the dollar was weakening, Bitcoin saw a massive surge, consolidating itself as a hedge against economic and political volatility. Bitcoin short positions amounting to over $97 million were liquidated within a day, as per CoinGlass’s data. The total liquidations across the crypto space neared $180 million, with Ethereum shorts contributing more than $26 million.
Conventional Markets Decline: Indication of A Concerned Market
The chaos wasn’t limited to the crypto space. Conventional financial markets also faced a sharp decline with Dow Jones Industrial Average, S&P 500, and Nasdaq dropping by 3% in mid New York trading. Experts suggest that the sell-off is a byproduct of the growing investor uncertainty regarding the Fed’s independence and the general economy resulting from the Trump’s actions.
Gold’s Surge: A Shift Towards Safer Options
Like Bitcoin, gold also witnessed an increase in its value above $3,420 per ounce, the highest price in its history. The increased value of both Bitcoin and gold simultaneously indicates a greater shift towards assets deemed as safe stores of value during uncertain times.
Diverging Trends: Bitcoin’s Potential as a Safe Asset
As cryptocurrencies have primarily mirrored the movements of equities, Bitcoin’s performance on Monday suggested a potential shift, acting as a traditional safe-haven asset. This divergence suggests that some market participants are starting to regard Bitcoin as a genuine hedge against certain economic and geopolitical risks.
Mixed Performance: Other Cryptocurrencies React
In the case of Bitcoin, its performance was not reflective of other major cryptocurrencies, which had a mixed performance. Ethereum remained flat at approximately $1,624, indicating stagnation. Dogecoin, XRP, and MATIC registered slight increases, and Solana decreased slightly as well. The TRUMP token, garnering newfound attention surrounding the former president, also saw notable increases of more than 2% as well.
Trade Policy and Market Volatility
The increase in the value of Bitcoin followed closely after changes to U.S. trade policy. Trump’s claims of “big progress” in trade discussions with Japan, alongside reports suggesting possible negotiations with China, added some optimism towards the market. However, the anger stemming from the previously established tariff timetable injection still dampened overall market sentiment.
Conclusion: A Market on Edge
The happenings of Monday highlight the extent to which politics and the market require equilibrium. For as long as Trump’s activities create speculation, people will continue to seek refuge in Bitcoin and gold. These next few days will be instrumental in deciding whether this shifts and what the enduring consequence will be for both cryptocurrency as well as conventional financial markets.
