In the early hours, cryptocurrency investors learned that Fed member Cook was dismissed, following allegations of real estate financial misconduct. Cook, who was against interest rate cuts, was expectedly removed, potentially increasing the number of pro-reduction members to six. This dismissal was part of a series of important developments today.
Fed, Interest Rates, and Crypto Decline
The decline accelerated last evening, but the $108,000 support was not violated, preventing a major altcoin loss series. The dismissal of Fed member Cook likely leaked prematurely, triggering large-scale sales. Despite anticipating a weakened dollar that would typically support cryptocurrencies, inflation concerns fueled a negative outcome.
Concerns about Fed losing its independence and accelerating inflation are not unfounded. Although Powell’s remarks on monitoring tariffs’ effects relieved markets, the institution’s autonomy is under threat. If Powell continues his strategy until May, inflation could approach 5%.
The new Fed member, possibly due to Trump’s influence, may disregard inflation, heightening worries for 2026.
Cryptocurrency Agenda
Minister Lutnick mentioned the need for lower interest rates in his latest speeches. Meanwhile, Brainard announced a 25 basis points cut at the September meeting. These details could have supported risk markets if not for the overarching concerns raised earlier.
Trump Media Group revealed a $6.42 billion revenue strategy to expand its cryptocurrency treasury, including integrating Cryptocom wallet and starting CRO Token integration.
Despite recent sales, BTC ETFs saw a net inflow of $219 million over six business days. Ether, with a remarkable $443 million inflow, continues to attract more interest than BTC.
To prevent further concerns about Fed’s independence, Trump needs to strongly propagate Cook’s misconduct being genuine. A judicial decision could confirm the dismissal isn’t political and dispel fears. However, convincing markets is challenging, especially after similar attempts with Powell.
