Bitcoin Outperforms XRP, ETH, and ADA as Perceived Threat to Fed Independence Sends Dollar Slipping
The significant threat to the Fed's independence has prompted traders to dump dollars, which has contributed to the rise in prices of BTC and gold.
Author: Omkar Godbole Updated April 21, 2025 3:47 AM Published April 21, 2025 2:42 AM
Key facts:
- Bitcoin rose more than 2% to $87,200, while the dollar index fell to a three-year low.
- Gold prices continued to rise, reaching an all-time high amid concerns over the Fed's independence.
- Reports of President Trump's efforts to oust Federal Reserve Chairman Jerome Powell have prompted traders to sell off the dollar against major currencies.
Bitcoin (BTC) outperformed more volatile alternative cryptocurrencies on Monday morning as the dollar index fell to a three-year low amid speculation that President Donald Trump is considering removing Federal Reserve Chairman Jerome Powell.
BTC rose more than 2% to $87,200, its highest since April 2, according to CoinDesk. The move signals a bullish breakout from the latest consolidation between $83,000 and $87,000. Major alternative cryptocurrencies such as payments-focused XRP, Ethereum’s ether, and Cardano’s ADA each rose more than 1%, but lagged BTC.
In currency markets, hedge funds began selling the U.S. dollar against major currencies including the euro, yen and Australian dollar, sending the dollar index to 98.5, its lowest since April 2022, according to TradingView data. The DXY has fallen 10% in the past three months. Dollar weakness typically weakens financial conditions, which encourages risk-taking in financial markets.
Meanwhile, gold continued to rise, hitting a record high of $3,382 an ounce, extending its year-to-date gain to 28%. S&P 500 and Nasdaq futures were down 0.5%.
Observers speculate that National Economic Council Director Kevin Hassett's comment on Friday about Trump's intention to remove Powell likely triggered the dollar sell-off, as well as a rise in BTC and gold prices.
“Bitcoin’s move to $87,000 appears to be driven by the sharp decline in the U.S. dollar and a +2% rally in gold, driven by Trump’s push to oust Fed Chair Powell. While a trade deal with Japan may be announced soon, the key catalyst today is the perceived threat to Fed independence,” Marcus Thielen, founder of 10x Research, told CoinDesk.
Trump wrote on Truth Social on Thursday that “Powell’s firing can’t happen too soon,” reiterating his calls for interest rate cuts the following day. Powell said early last week that the Fed would wait for more economic data before making changes to borrowing costs and warned of the risks of stagflation.
Chicago Federal Reserve Bank President Austan Goolsbee warned that Trump's decision to fire Jerome Powell would undermine confidence in the Fed.
