Trump's Battle with the Federal Reserve Has the Cryptocurrency Market Suffering

Trump has finally taken action against the Federal Reserve. Overall, this is a clear signal of a softening stance, and a September rate cut can be considered a foregone conclusion. The market reaction was immediate. On the same day, all three major US stock indices closed higher: the Dow Jones Industrial Average rose 1.89%, the S&P 500 rose 1.52%, and the Nasdaq Composite rose 1.88%. Even the often-maligned A-shares rose by over 3,800 points, signaling a bull market rally. The chain reaction was also evident in the crypto market, with BTC rebounding to $117,000 and ETH performing even more impressively, breaking through $4,800 that same day and reaching a new all-time high of $4,956 on August 25th. As to whether this claim is true, we need to go back to last week. Also on social media, Bill Pulte, Director of the Federal Housing Finance Agency, accused Cook of declaring two properties as primary residences to obtain more favorable interest rates and stated that he had submitted the allegation to the Department of Justice. Despite seemingly minor housing interest rates, Trump's relentless efforts have stirred up a turmoil. Following the incident, Trump immediately retweeted the report and bluntly stated, "Cook should resign immediately." Cook subsequently responded on social media, stating that he would never resign due to bullying. The question arises: Why Cook? Does Trump have the power to fire her? From a legislative perspective, while presidential removal is difficult to achieve due to the independence of the Federal Reserve, the power does exist. The Federal Reserve Act stipulates that Federal Reserve Board members serve fixed terms, and the president can remove them only for "good cause." This justification is relatively vague, as no one has attempted it in years. However, rationally, serious misconduct or ethical issues could be grounds for removal. This demonstrates the Federal Reserve's remarkably stable internal structure, but this stability also has inherent weaknesses: a lack of flexibility and adaptability, with decisions based solely on data. This long-standing characteristic of the Fed has deeply irritated Trump. However, the long tenure of the Fed's governors has also hindered swift intervention, leaving him struggling to balance policy initiatives with inflation. Trump had previously criticized Powell more than once for his delay in cutting interest rates. After trying various methods without success, he naturally turned his attention to the board members. Cook, already a member of his own party and now facing accusations of corruption, became the preferred political tactic, with the Trump administration attempting to intimidate the board members through Cook's case. Mortgage fraud is nothing new, and several Democratic Party members have been investigated by the Trump administration. In terms of capital flows, it appears that more funds are flowing from BTC into ETH. On the day of the flash crash, approximately $2 billion in Bitcoin funds were reallocated to Ethereum, indicating a more positive outlook for ETH. Institutional holdings are also continuing to increase. BitMine, the leading ETH stock, received 131,736 ETH from the addresses of three institutional platforms: BitGo, Galaxy Digital, and FalconX, in the past 12 hours. Regarding unlocking, to maintain price stability, only 20% will be unlocked for early backers. The remaining 80% will be determined by the community through a governance vote. Notably, tokens held by the founding team, advisors, and partners will not be unlocked at launch. Based on current pre-market prices, WIFI has fallen to $0.26 after peaking at $0.55. While this still offers significant room for growth compared to the early purchase prices of $0.015 and $0.05 in the previous rounds, WIFI's fully diluted valuation is currently only $26 billion, which is only considered acceptable. While the founding team will not unlock tokens upon launch, the early realization of value through contract hedging is not uncommon. It's foreseeable that by September 1st, Trump will be making a lot of calls and promoting the market, but whether this will be another attempt to drain liquidity like Trump or simply pump and dump the market to benefit the public remains to be seen. More likely, Trump will release new positive news on September 1st to capitalize on his crypto backyard, where he can withdraw funds at any time. Looking solely at cryptocurrencies, with the US stock market pulling in its wake and domestic policies supporting its performance, the crypto market's independent momentum has gradually faded. However, both internal and external factors appear to be closely tied to Trump. Ultimately, it must be acknowledged that with the increasing politicization of the crypto market, Trump and the cryptocurrency community have long been entangled.