Bitcoin spiked to an intraday high of $92,356 on Sunday night after U.S. Federal Reserve Chair Jerome Powell confirmed he is under criminal investigation by the Department of Justice, an unprecedented move that raised concerns about the Fed’s independence and potential political interference in monetary policy.

The initial reaction, fueled by haven flows and speculation that Powell’s legal troubles could compromise the Fed’s autonomy, saw gold and silver rally alongside BTC. Analysts said the episode reinforced bitcoin’s narrative as a hedge against politicized institutions. 

This story is an excerpt from the Unchained Daily newsletter.

“This is about whether the Fed will be able to continue to set interest rates based on evidence… or [be] directed by political pressure,” Powell said in a video statement Sunday.

But the crypto rally quickly faded. By early Monday, BTC had dropped back to around $90,200, erasing most of its gains. Ether and other major coins mirrored the pullback, despite Sunday’s short-lived spike.

Prediction markets appear unconvinced that the DOJ probe will result in Powell’s early exit, with Polymarket giving just a 13% chance of removal before May 14. 

The muted crypto reaction suggests traders are waiting for more clarity.

Still, gold remained elevated above $4,590 an ounce, hinting that traditional safe havens are pricing in greater political risk. 

For now, bitcoin’s hedge appeal may remain more narrative than trade.