Every crack in central bank independence torn by political power injects new energy into the treasury of the crypto world.

The smoke of Washington is spreading to global financial markets. The renovation budget controversy of the Fed headquarters—apparent issues with a $2.5 billion project management—actually hides the White House's systematic siege on the Fed's independence. Budget chief Russell Watter limited Powell to respond to inquiries within seven days on the grounds of 'misleading Congress', while behind this political drama lies Trump's thirst for rate cuts.

When the White House pressures the Fed under the guise of infrastructure audits, Bitcoin quietly breaks through the historical high of $118,000. This is not a coincidence; it is the bloody truth of capital voting with its feet.

Political gamesmanship, a century-long crisis of central bank independence

Trump's team is waging a multi-front battle to dismantle the Fed's defenses. On one side, they question Powell's governance by leveraging 'infrastructure impeachment' tactics due to skyrocketing renovation costs; on the other side, they plan to nominate a 'shadow chair' to pressure Powell to lower interest rates before he steps down.

Even more dangerous is the breakthrough on the legal front. The Supreme Court's May ruling suggests that Fed governors are under special protection, but Trump's team is exploring the possibility of having Treasury Secretary Mnuchin serve as Fed chair. This personnel 'institutional arbitrage' is essentially a decapitation move to bypass the Federal Reserve Act.

Political pressure has distorted monetary policy expectations. Daley's insistence on 'two rate cuts in 2025' appears feeble in the face of Trump's social media outburst claiming 'rates are at least 3 percentage points too high'. When the central bank loses its interest rate pricing power, the foundation of fiat currency credit begins to crumble.

Market panic, capital turns to crypto as a safe haven

Political uncertainty immediately triggers a tsunami in traditional markets. After rumors of Powell facing pressure, the Dow dropped 653 points in a single day, and the yield on the 10-year U.S. Treasury plunged from 4.55% to 4.35%. Goldman Sachs' report cuts to the chase: If Powell leaves, his successor may yield to the Treasury and initiate 'fiscal dominance'.

This model is often a precursor to malignant inflation in emerging markets. Capital is voting with real money:

  • Bitcoin surged 24% in a week, breaking through the historical peak of $118,000

  • Spot ETFs attracted $1.2 billion in a single day, with BlackRock, Fidelity, and other institutions swallowing BTC

  • MicroStrategy holds over 600,000 bitcoins, and sovereign funds are secretly buying

Crypto analyst John Glover has raised his Bitcoin target price to $136,000, warning that 'supply shock' is occurring—exchange reserves are depleted, long-term holders are locking up, and institutions are swallowing thousands of coins daily via ETFs.

Triple fuel ignites an epic Bitcoin bull market

The battle between the White House and the Fed injects triple boosters into the crypto bull market:

Fiat currency devaluation anxiety: Trump's $3 trillion tax cut plan requires cheap financing, and political pressure to cut rates will accelerate the dilution of the dollar's purchasing power. Historical data shows that every time the real interest rate falls by 1%, Bitcoin rises by 37%.

Regulatory arbitrage window: When the CLARITY Act clarifies the commodity attributes of tokens, traditional financial giants will fully dive in. Grayscale's report shows that the proportion of institutional allocation to crypto assets has soared from 0.5% to 3.2%.

Geopolitical safe-haven necessity: Trump's tariff policy has buried inflation time bombs, with 35% import tax from Canada and 50% from Brazil driving up consumer prices. Bitcoin's correlation with the S&P 500 has dropped to 0.18, becoming the ultimate risk hedge tool.

In the eye of the storm, a golden moment for historic wealth transfer is laid out

The institutional rift torn open by the Fed's renovation scandal will not heal. Senator Tim Scott's comparison of the Fed headquarters to the 'Palace of Versailles' signals that Congress will strengthen regulatory legislation. This crisis is essentially a sign of the corrosion of the dollar credit system.

The crypto market has entered a self-reinforcing bull market cycle:

  • The scale of tokenized assets has surpassed $25 billion, with VanEck predicting it will reach $50 billion by the end of the year

  • Traditional giants like Charles Schwab are secretly developing crypto entry points, closing the last window for retail investors

  • After Bitcoin's halving, daily sell-off by miners has dropped to 300 coins, only 1/40 of the daily ETF demand

As Powell reiterates 'I won't leave early unless I'm dead' amid political siege, newborns in the crypto world are lining up outside exchanges. At this historical crossroads, one side faces the sinking of fiat's old continent, while the other sees the dawn of crypto's new frontier.

Sovereign wealth funds have quietly taken action. The Kingdom of Bhutan is liquidating its treasury reserves of over 200 bitcoins, while trading terminals on Wall Street show that a certain Middle Eastern sovereign fund has swallowed 12,000 bitcoins via the OTC market in the past 72 hours—enough to cover the entire renovation project of the Fed headquarters with leftovers.

As the political rift in the traditional financial system widens, the gravitational pull of the crypto world is strengthening. Will you cling to depreciating fiat currency and pray on a sinking ship, or board the rising digital ark?

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