Trump’s Relentless Grip: Whose Turn To Bend Next?

Trump’s pressure on Fed and Crypto’s Unique Position

President Trump’s actions have shaken markets and governance globally. However, the crypto sector remains relatively untouched, though it’s safety depends on a fragile political landscape.

On August 26, Trump dismissed Fed Governor Lisa Cook, citing alleged mortgage fraud. This unprecedented move by Trump could reshape the balance between the white House and the central bank.

On August 26, President Trump dismissed Federal Reserve Governor Lisa Cook, citing alleged mortgage fraud. This action has set up a legal confrontation that could redefine the relationship between the White House and the Fed. Fed governors serve 14-year terms and can only be removed “for cause,” a standard never tested in court. This move threatens the Fed’s independence, risking financial instability.

Trump has also repeatedly threatened Fed chair Jerome Powell, accusing him of hindering economic growth. These threats have unsettled markets, with Treasury yields rising and the dollar weakening each time Trump raises the possibility of Powell’s dismissal. This pressure on the Fed could lead to easier monetary policies sooner, but it also raises concerns about political interference and potential inflation.

Meanwhile, crypto markets remain closely tied to U.S. liquidity conditions. Bitcoin and Ethereum have historically outperformed equities when interest rates fall. However, Trump’s pressure on the Fed could lead to volatility, with bitcoin surging on liquidity but pulling back as investors question U.S. governance stability.

Trump’s confrontational approach extends beyond the Fed. Tesla, SpaceX, major broadcasters, and universities have faced funding freezes and license reviews after clashes with the White House. However, crypto has been spared, as it currently serves Trump’s political, financial, and rhetorical interests.

Trump’s crypto ventures, including World Liberty Financial and TRUMP tokens, have delivered major profits. His media company recently launched a crypto treasury vehicle with Crypto.com, aiming to acquire Cronos tokens valued at $6.4 billion. The Official Trump memecoin, launched on the Solana blockchain, has also generated notable profits.

Trump’s use of pressure has also extended to foreign governments through trade policy. New tariffs on India, Europe, Mexico, and China have unsettled trade ties, prompting retaliation threats and concerns over supply chain disruption. However,rivals are adopting crypto instruments to counter U.S. dominance. India, Europe, and China are exploring stablecoins to reduce reliance on dollar-based systems.

While crypto has benefited from this surroundings, its exemption is not guaranteed. If the industry ceases to strengthen its leverage, it could face the same treatment as other institutions. The upcoming Fed meeting on September 16 and 17 will be crucial, with an 88% probability of a quarter-point cut. A reduction would likely support risk assets, while hesitation could deepen the correction in crypto.