Bitcoin traded higher Wednesday, rebounding after sliding to a seven-week low in the prior session. The world’s largest cryptocurrency was up 1.2% at $111,272.40 as of 02:32 ET (06:32 GMT), after briefly dipping below $109,000 following the liquidation of roughly 24,000 tokens.
Despite the recovery, Bitcoin remains down more than 10% from its August record high above $124,000. Much of the earlier rally was fueled by bets on a potential Federal Reserve pivot toward rate cuts—an outlook now clouded by escalating political tensions.
Fed Dispute Clouds Market Sentiment
Concerns over the Federal Reserve’s independence intensified after former President Donald Trump attempted to remove Governor Lisa Cook from her post.
Trump accused Cook of mortgage fraud linked to 2021 loan documents, though Cook denied the allegations and vowed to fight her dismissal in court. Her attorney, Abbe Lowell, said the action violated the Federal Reserve Act, which only permits removal “for cause.”
The episode has rattled markets, reviving questions about the Fed’s ability to operate free of political pressure. Investors are reassessing the likelihood of near-term rate cuts, balancing potential monetary easing with long-term institutional uncertainty.
Key developments:
- Fed independence faces heightened scrutiny.
- Lawsuit expected as Cook challenges dismissal.
- Rate-cut expectations remain but confidence is shaky.
Crypto Ventures and Altcoin Gains
In a separate development, Trump Media & Technology Group (NASDAQ: DJT) announced a joint venture with Crypto.com to establish a crypto treasury firm.
The venture aims to accumulate Cronos (CRO) tokens, with initial funding including:
- $1 billion in CRO tokens
- $200 million in cash
- $220 million in warrants
- $5 billion equity line of credit from a Yorkville affiliate
Trump Media will purchase $105 million in CRO tokens, while Crypto.com takes a stake in Trump Media equity. The news sent CRO prices surging and lifted Trump Media shares.
Broader crypto markets also recovered:
- Ethereum: up 4.1% to $4,602.91
- XRP: higher by 3.5% to $3.01
- Solana: jumped 8.5%
- Cardano: added 3.3%
- Polygon: up 4.1%
- Dogecoin: rose 5.4%
- $TRUMP token: gained 2.4%
Altcoins’ rally reflected improved sentiment following sharp losses earlier in the week, though volatility remains elevated amid shifting macro and political risks.