Bitcoin Remains Unfazed by Powell Investigation as DOJ Sets Sights on Federal Reserve Chief

Justice Department Launches Criminal Probe Into Fed Chair Jerome Powell

The U.S. Department of Justice has initiated a criminal inquiry targeting Jerome Powell, the current chair of the Federal Reserve. This unprecedented step has sparked widespread debate about the central bank’s ability to operate independently.

Jimmy Xue, co-founder and COO of Axis, a quantitative yield protocol, commented to Decrypt, “These legal actions introduce fresh uncertainty to the broader economic landscape.”

He further explained, “Challenges to the central bank’s autonomy are strengthening Bitcoin’s reputation as an impartial asset, free from legal and political entanglements.”

Xue observed that this perception of neutrality is drawing institutional investors to Bitcoin, who see it as a safeguard against the possibility that monetary policy could be swayed by high-level legal disputes.

Following the news, traditional safe havens like gold and silver surged by nearly 2% and 5%, respectively. Bitcoin’s response was more subdued, with its price climbing 1.7% to $92,000, according to CoinGecko.

Powell acknowledged the investigation in a statement released Sunday, clarifying that it focuses on accusations he misled Congress regarding a headquarters renovation. He dismissed these claims as a mere “pretext.”

He characterized the probe as a direct threat to the Federal Reserve’s independence, stating, “This is fundamentally about whether the Fed can continue to set interest rates based on data and economic realities, or if monetary policy will instead be dictated by political influence or intimidation.”

The investigation is being led by Jeanine Pirro, the U.S. Attorney for the District of Columbia and a Trump appointee, a fact that quickly stirred controversy within the President’s own party.

Senator Thom Tillis (R-NC), a member of the Senate Banking Committee, denounced the move as a blatant attempt to undermine the Fed’s independence and pledged to block all Federal Reserve nominations, including the upcoming Chair position, until the issue is resolved.

“Now it’s the Department of Justice’s own independence and credibility that are under scrutiny,” Tillis remarked in a statement on Sunday.

Potential Implications for the Crypto Market

Tim Sun, a senior researcher at HashKey Group, told Decrypt that if the Justice Department’s case succeeds, it would set a “highly dangerous precedent.” He warned, “The President could leverage executive power and the courts to punish a central bank chair for not aligning with his preferred monetary policies.”

Sun explained that directly challenging the Fed’s independence could destabilize the entire dollar and U.S. Treasury system, embedding political risk into financial models and ultimately favoring decentralized assets that are immune to government manipulation.

In the near term, Sun anticipates increased volatility rather than an immediate surge. “Such developments would unsettle rate expectations, distort the yield curve, and initially trigger greater volatility across all risk assets, including Bitcoin,” he said.

He added that the real transformation would come later, as markets adjust and Bitcoin’s role as an institutional hedge becomes more pronounced, with investors factoring in a lasting risk premium for political interference.

“If the Federal Reserve were to become subordinate to the executive branch, resulting in a sharp decline in the dollar or a loss of control over interest rate expectations, Bitcoin could be on the verge of a defining moment,” Sun concluded.

However, he cautioned that for now, Bitcoin’s value remains closely linked to the dollar.