Bitcoin’s appeal as a non-sovereign risk asset could gain renewed attention amid a criminal investigation into U.S. Federal Reserve Chair Jerome Powell.
Federal prosecutors have opened a probe regarding Powell’s testimony to a Senate committee on renovations to the Fed’s buildings. In a statement on Sunday, Powell said the investigation stems from the Fed setting interest rates based on its assessment of public interest, rather than the preferences of the President. President Donald Trump has repeatedly criticized Powell and the Fed for not meeting his demands for interest rate cuts.
Analysts say the investigation introduces near-term political headwinds for risk assets, particularly U.S. equities. Yet, a potential “systemic correction” in stocks could highlight Bitcoin’s value as a decentralized alternative.
“When confidence in dollar credibility and central bank independence is questioned, decentralized assets tend to attract narrative-driven risk premia,” analysts at crypto exchange Bitunix told Cointelegraph. “Over the long term, if political interference in monetary policy becomes structural, Bitcoin’s role as a ‘non-sovereign risk asset’ is likely to be further reinforced.”
Over the past 24 hours, Bitcoin climbed 0.85%, while privacy-focused tokens saw stronger gains, with Monero up 18% and Zcash rising 6.5%.
“This environment is literally what Bitcoin was created for,” noted popular analyst Will Clemente.
“The President is going after the Fed chair. Metals are surging as sovereigns diversify reserves. Stocks and risk assets are at record highs. Geopolitical risk is increasing,” Clemente wrote on X Monday.
Crypto sentiment hints at a local bottom
Meanwhile, data from crypto platform Matrixport suggests a gradual improvement in investor sentiment, which historically increases the likelihood of a market recovery.
“The moving average of our Greed & Fear Index is forming a clear base — a condition that has historically coincided with Bitcoin’s bottoming phases,” Matrixport noted in a Monday X post.
Despite the improving sentiment, the industry’s most successful traders, tracked as “smart money” by Nansen, are still betting on a short-term decline in Bitcoin.
Smart-money traders held a net short position on Bitcoin totaling $127 million, adding $1.6 million in shorts over the past 24 hours, according to crypto analytics platform Nansen.
In contrast, smart-money activity remained bullish on other major tokens. Traders were net long on Ether for $674 million and on XRP for $72 million, indicating stronger upside expectations for these assets.
