Powell Probe Sparks Interest in Bitcoin Non-Sovereign Qualities

TLDR

• Federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell.
• The investigation is linked to Powell’s Senate testimony regarding renovations to Federal Reserve buildings.
• Powell stated that the probe is a result of the Fed acting independently from the President’s preferences.
• Analysts believe that Bitcoin may benefit as a non-sovereign asset during political instability.
• Bitunix analysts said decentralized assets gain risk premia when confidence in central banks weakens.

Federal prosecutors launched a criminal investigation into US Federal Reserve Chair Jerome Powell over his Senate testimony regarding Fed building renovations, and this development may influence Bitcoin’s position as a non-sovereign asset, according to analysts. Crypto markets reacted with mild optimism as Bitcoin’s price rose slightly while privacy-focused tokens saw higher gains. Analysts now suggest that the political tension could drive narrative-driven demand for decentralized assets like Bitcoin.

Bitcoin’s Safe-Haven Narrative Strengthens During Political Unrest

Bitcoin gained 0.85% over the past 24 hours as analysts highlighted growing investor interest in non-sovereign assets. The criminal probe into Powell’s testimony may weaken investor trust in central bank independence. This shift could push investors toward decentralized assets that are immune to political interference.

Crypto exchange Bitunix stated that such an environment strengthens Bitcoin’s long-term appeal.

Bitcoin now trades at $90,741 as its role as a hedge gains attention. Market participants are watching the Fed’s response as the political situation evolves. Powell said the probe is a result of the Fed acting independently, not at the President’s direction.

Privacy Coins Outperform As Investors Hedge

Monero (XMR) rose 18% to $570.89, and Zcash (ZEC) gained 6.5% to $406.91 in the last 24 hours. These privacy coins outperformed Bitcoin as some traders shifted toward tokens with greater privacy features. The gains reflect broader interest in sovereign alternatives during financial uncertainty.

Will Clemente, a well-known Bitcoin analyst, commented on X that “this environment is literally what Bitcoin was created for.” He noted increased demand for metals and a surge in risk assets as geopolitical tensions rise. Clemente linked these conditions to investors seeking safety from traditional monetary systems.

Crypto sentiment is slowly recovering, according to Matrixport data. Their Greed & Fear Index suggests a base formation pattern, often seen near market bottoms. Historical trends show that such a base can precede a price recovery phase in Bitcoin markets.

Smart Money Cautious On Bitcoin, Bullish On Ether and XRP

Despite the improving sentiment, smart money remains cautious on Bitcoin. Nansen data showed smart money was net short Bitcoin by $127 million. Traders added $1.6 million in fresh shorts over the last 24 hours.

However, smart money took long positions in Ether and XRP. Ether held a $674 million net long, while XRP saw $72 million in bullish bets. These positions suggest that large traders expect potential upside for both assets in the short term.

Nansen data tracks high-performing wallets and institutional behavior. These traders often anticipate short-term price movements with advanced strategies. Their current stance indicates hesitation toward Bitcoin despite its recent gains.

Matrixport and Nansen continue to monitor these trends closely. While Bitcoin’s role gains renewed interest, traders are hedging across various assets. The market remains sensitive to political developments surrounding the Federal Reserve.

Bitcoin traded near $90,741 as of the latest market update. Ethereum stood at $3,117 and XRP at $2.05, maintaining their gains. Privacy tokens and large-cap altcoins may continue to react to macroeconomic signals this week.

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