The mounting conflict between President Donald Trump and the Federal Reserve has caused new turbulence in the world's markets, questioning the independence of the central bank while pushing the role of alternative assets like Bitcoin.
The friction bubbled over when:
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Trump demanded the removal of Fed Governor Lisa Cook over alleged mortgage fraud.
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Cook, appointed under Biden, denied the accusations.
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She pledged to defend her position in court.
Trump, nevertheless, has used this as an illustration of his larger argument against the Fed.
Previously, Trump nicknamed Jerome Powell " too late," saying the Fed under him had not initiated aggressive rate cuts, and high borrowing costs are squeezing growth. In July, Trump even called Powell "truly one of [his] worst appointments."
More news on Trump:
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Crypto analyst reveals how India can beat Trump's 50% tariffs
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Trump ends Biden's war on crypto in 200 days, says White House
Markets reacted immediately. The U.S. dollar index dropped sharply following Trump's announcement, while long-dated Treasuries sold off—moves that analysts interpreted as signals of increasing anxiety over U.S. monetary credibility.
Bitcoin's bullish case
For Bitcoin advocates, the instability of the traditional market is simply a validation of their long-standing concerns over the volatility of fiat currencies.
On Aug. 26, Strike CEO Jack Mallers criticized Fed Chair Jerome Powell's dovish statements at Jackson Hole, where Powell suggested that another rate cut might be forthcoming in September. In Powell's Jackson Hole speech, he said:
"Risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation when our goals, our intention, like this, our framework calls for us to balance both sides of our dual mandate. Our policy rate is now 100 basis points closer to neutral than it was a year ago. Nonetheless, with policy and restrictive territory, the base territory, the baseline outlook, and the shifting balance of risks may warrant adjusting our policy stance."
Bitcoin as an 'exit door'
Mallers said:
"Your central banker just walked into a hotel in Wyoming and said, I'm going to choose the government over inflation. Welcome to a more expensive life."
This is "exactly why I use Bitcoin," he added.
Mallers compared Bitcoin to an "engineered exit door"from a burning building that will only grow more expensive to use over time. He went on to say, "The government will be financed at the expense of the people."Attached to his X post was the official letter by the president firing Lisa Cook.
Similar sentiment was shared by Eric Johnston of Cantor Fitzgerald. According to Johnston, Trump's influence on the Federal Reserve would ultimately lead to a bullish outlook for Bitcoin.
This story was originally reported by TheStreet on Aug 27, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
