Bitcoin Holds Firm as Trump–Fed Clash Tests Its Safe‑Haven Story

Ben Graham · January 12

Bitcoin went through a political stress test after Federal Reserve Chair Jerome Powell said the Justice Department had threatened him with criminal charges during a growing conflict with President Donald Trump.

Bitcoin’s price dropped to around the $90k level on the day before regaining the $91k price level as of today, which is a small move for a story that stirred tension in Washington. The timing stands out as investors continue to debate whether Bitcoin really holds up when governments clash.

There is a bigger question sitting underneath all of this: When politics start pushing on money policy, does Bitcoin act like a safe place to park value, or does it behave like any other risky asset?

Why Is the Fed Fighting With Trump?

The Federal Reserve controls US monetary policy. You can think of it as the country’s temperature control for money, raising or lowering interest rates to manage inflation and growth.

Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH

— Federal Reserve (@federalreserve) January 12, 2026

Powell says the Justice Department opened a criminal investigation linked to renovations at the Fed’s buildings, and he believes the move is political pressure. Trump has criticized Powell for not cutting rates faster and says he knows nothing about the investigation.

This kind of conflict tends to catch the market’s attention because interest rates affect mortgages, savings accounts, stock prices, and demand for Bitcoin.

What Does This Mean for Bitcoin Holders?

Bitcoin has no CEO and no central authority controlling how much exists. That idea sits at the core of why people buy it, and moments like this put that idea to the test.

So far, the reaction has been calm. A 1% rise suggests traders see this as background noise rather than a reason to panic, which lines up with how Bitcoin prices have behaved during past headlines tied to the Fed.

When political pressure leads to looser money or weaker trust in institutions, Bitcoin often attracts more interest. That is why some analysts see situations like this as real-world tests of Bitcoin’s role as a safe place to store value.

Political Pressure Has Broken Currencies Before

This pattern has played out before. In the 1970s, President Nixon pushed the Fed to keep rates low ahead of an election, and inflation followed. In Turkey, political shakeups at the central bank helped push inflation to around 80% in 2022.

Bitcoin was designed with these situations in mind. When confidence in money managers fades, assets with fixed supply start to look appealing.

That also helps explain why Bitcoin often reacts to Fed drama while many smaller coins lag behind, a pattern that has repeated during past market moves tied to changes in liquidity.

Risk Check: Bitcoin Is Not Immune

Bitcoin still behaves like a tech stock during major market sell-offs. When fear spreads, investors sell whatever they can, and that includes Bitcoin.

There is also a political angle to watch. Trump has spoken positively about Bitcoin and has even backed the idea of a US Bitcoin reserve. Critics argue that heavy government involvement undermines Bitcoin’s original goal of remaining neutral.

For everyday investors, the takeaway stays simple. View Bitcoin as something to hold over time, not something to trade on headlines. Keep positions reasonable and never risk money needed for rent or bills.

If the conflict around the Fed grows, Bitcoin will keep being tested in public. Each episode adds another data point on how it behaves when politics and money collide.

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