Trump’s crypto Gambit Amid Global Market Upheaval
On August 26, President Donald Trump’s dismissal of Federal Reserve Governor Lisa Cook sparked a heated debate about central bank independence. Cook refused too resign, despite Trump’s accusations of mortgage fraud. This unprecedented move comes as Trump also threatens Fed Chair Jerome Powell over interest rate policies.
The tension rises each time Trump hints at Powell’s removal, sending Treasury yields up and the dollar down. Analysts fear losing Fed independence would destabilize the economy. Crypto markets, meanwhile, mirror U.S. liquidity trends. Rates fall,risk assets surge; Bitcoin climbs during expected cuts.
However, stable Federal policy remains the cornerstone of financial health. An unstable governance pool could meen that Bitcoin might sky-rocket initially due to liquidity injections but plummet when investors worry about long-term monetary policy.
Trump’s actions extend beyond banking. Corporate giants like Tesla and SpaceX faced financial hardships after sparring with the president. Media houses and universities also felt the brunt of Trump’s pressure tactics.
- tesla saw a 14% stock drop after Trump threatened subsidy cancellations.
- ABC and NBC faced possible license revocation.
Surprisingly, crypto enjoys a safeguard in this stormy climate. Trump, once a Bitcoin skeptic, now champions digital assets. His policies promote innovation, clarity, and stablecoins to boost U.S. dollar influence.
Such as, the GENIUS Act established a federal framework for stablecoins. Trump Media & technology Group’s latest venture, the CRO Strategy, plans to purchase $6.4 billion in Cronos tokens. World Liberty Financial and TRUMP tokens have also reaped substantial gains.
Despite these advantages, reliance on Trump’s favor exposes crypto to risks. His confrontational trade policies have strained relations with countries like India, Europe, Mexico, and China. Tariffs on India jumped from 25% to 50%, echoing retaliatory threats.
This leads to a surge in stablecoin use as countries seek option financial instruments. The international adoption of stablecoins like Tether and USD Coin reflects growing demand for cross-border settlement solutions.
In September, the Fed’s decision looms large. An expected rate cut could buoy risk assets, including cryptocurrencies. Yet, persistent volatility outlines the shaky foundation upon which crypto stands. The industry’s fate hinges on its ability to navigate Trump’s unpredictable support.
