Bitcoin surged past $87,200 on Monday, reaching its highest level since early April, while the U.S. dollar index (DXY) plummeted to a three-year low. The moves came amid growing speculation that former President Donald Trump is exploring ways to remove Federal Reserve Chair Jerome Powell if re-elected—a development that has rattled traditional and crypto markets alike.

Bitcoin Breaks Out as Dollar Weakens

BTC rallied over 2% in early Asian trading hours, outperforming major altcoins like Ethereum (ETH), XRP, and Cardano (ADA), which saw more modest gains of around 1%. The breakout from Bitcoin’s recent consolidation range ($83,000–$87,000) suggests renewed bullish momentum, fueled by a rapidly weakening dollar.

The DXY fell to 98.5, its lowest level since April 2022, as hedge funds and institutional traders aggressively sold the dollar against the euro, yen, and Australian dollar. The greenback has now declined 10% over the past three months, reflecting deepening concerns over Fed credibility and economic uncertainty.

“$BTC surge to $87,000 appears to be driven by a sharp drop in the U.S. dollar and a 2% rally in gold—both triggered by Trump’s push to replace Powell,” said Markus Thielen, head of research at 10x Research.

Gold Hits Record High as Investors Seek Safety

Gold, often seen as the ultimate safe-haven asset, soared to a new all-time high of $3,382 per ounce, bringing its year-to-date gains to an impressive 28%. The simultaneous rally in both Bitcoin and gold underscores growing investor anxiety over U.S. monetary policy stability.

“Gold and Bitcoin are moving in tandem again—signaling market fears over inflation, rate policy, and now political pressure on the Fed,” noted a prominent macro strategist.

Trump’s Fed Threats Spark Market Jitters

Reports surfaced late last week that Trump is exploring legal avenues to remove Powell if he wins the November election. In a post on Truth Social, Trump declared:

“Powell’s termination cannot come fast enough.”

This renewed attack on the Fed’s leadership has amplified concerns over central bank independence, particularly as the U.S. faces rising stagflation risks.

Chicago Fed President Austan Goolsbee responded on Sunday, warning that any attempt to oust Powell would undermine Fed credibility and destabilize global markets.

Meanwhile, Powell has maintained that the Fed remains data-dependent on rate decisions but acknowledged that stagflation risks are rising—a troubling signal as the U.S. heads into a contentious election season.

Key Takeaways for Investors

- Bitcoin and gold are rallying as hedges against dollar weakness and Fed instability.

- Political interference in Fed policy could trigger further market volatility.

- Stagflation concerns may push more capital into hard assets like BTC and gold.

As the Fed’s independence comes under scrutiny, crypto and precious metals could see sustained demand from investors seeking alternatives to traditional financial systems.

Stay tuned to @Aureum Bellum & @TheCryptoStrategist for more insights on how macro trends are shaping crypto markets.