Bitcoin rises 1% against the trend, Trump and Powell conflict escalation triggers risk aversion sentiment

On the afternoon of January 12, 2026 (Hong Kong time), as the conflict between US President Trump and Federal Reserve Chair Jerome Powell continues to escalate, global financial market sentiment has noticeably weakened. US stock index futures and the US dollar declined in tandem, while Bitcoin defied the trend and rose by approximately 1%, once again being viewed by the market as a potential safe-haven asset.

Data shows that Bitcoin temporarily surged to around $92,000, but overall remained within the $89,000 to $95,000 range established last week. Meanwhile, Nasdaq index futures fell by about 0.8%, S&P 500 futures declined by 0.5%, and the US dollar index retreated from the previous high of 99.26 to around 99.00. Gold prices continued to hit record highs, reaching as much as $4,600 per ounce, with traditional safe-haven assets and cryptocurrencies strengthening simultaneously.

It is noteworthy that Bitcoin’s recent movement has clearly decoupled from technology stocks. Usually, Bitcoin shows a strong correlation with the Nasdaq index, but in the current context, the market is more inclined to view it as a hedge against political and monetary policy uncertainties. This shift reflects that some funds are seeking “non-sovereign, anti-establishment” stores of value.

The trigger for the tension came from recent weekend statements. Powell revealed that the Trump administration threatened to file criminal charges related to the renovation of the Federal Reserve headquarters. Powell believes these accusations are politically motivated, aimed at pressuring the Fed to further cut interest rates.

Since taking office in 2025, Trump has publicly criticized the Fed’s monetary policy multiple times, accusing Powell of not being proactive enough in cutting rates, and has repeatedly called for the benchmark rate to be lowered to 1% or even lower. Although the Fed has previously lowered rates to 3.5%, the market generally expects that the policy rate will remain stable for at least the coming months.

Market forecasts indicate that investors do not believe Powell will resign early before the end of his term, but ongoing attacks on the central bank’s independence have posed potential risks to market confidence and the stability of the dollar. Historically, cases where political interference triggered currency crises are still viewed as important warnings.

Against this backdrop, Bitcoin’s price performance, the weakening of the dollar index, and the decline in US stock futures are seen as different reactions within the same macro narrative, adding more uncertainty to the 2026 financial markets.