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The new week in the Bitcoin and cryptocurrency market began with news that the US Department of Justice has launched an investigation into Federal Reserve Chairman Jerome Powell.
Following statements from Powell and President Donald Trump regarding the investigation, Bitcoin and altcoins experienced upward movement.
At this point, Bitcoin rose above $92,000, while Ethereum (ETH) and especially privacy-focused tokens stood out. Monero (XMR) increased by 17.9%; Zcash (ZEC) rose by 9.76%.
While the market interprets these events as a sign that some of the safe-haven demand is shifting towards Bitcoin, analysts suggest that the investigation into Powell has benefited Bitcoin.
Speaking to The Block, Peter Chung, head of research at Presto Research, stated that Bitcoin’s rise was related to the Powell events, noting that gold also rose sharply at the same time.
“These price movements strongly suggest that Powell’s statements about the Fed’s independence being threatened have triggered investor concerns about the USD-led traditional financial system.”
As confidence in the dollar’s reserve currency status diminishes in the market, investors will begin to seek hedging options against the traditional system. Gold and Bitcoin are such hedging options.”
Vincent Liu of Kronos Research stated that Bitcoin and Ethereum rose thanks to technical support and strategic purchases at key levels, adding that investors are closely watching three key developments this week: “Powell’s dispute with the Justice Department, developments regarding tax cut plans, and the US Consumer Price Index data to be released on Tuesday.”
BTSE COO Jeff Mei warned that the US market could experience sharp movements at the intraday open given the escalating political tensions. “Due to the Trump-FED/Powell disagreement, it’s possible the market will show a decline at the US open,” he said.
*This is not investment advice.