Major Cryptos Rally After Dip, with Analysts Citing Risks to Central Bank Neutrality.

Bitcoin Rebounds as Fed Dissent Sparks Debate Over Central Bank Independence

Major cryptocurrencies regained lost ground Wednesday after the Federal Reserve’s decision to keep interest rates unchanged at 4.25% exposed growing political pressures, raising concerns over the central bank’s independence.

While the Fed’s hold was widely expected, two Trump-appointed officials—Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller—dissented, voting in favor of a rate cut. Their stance, seen by analysts as aligning with former President Donald Trump’s repeated calls for looser monetary policy, has heightened scrutiny of the Fed’s autonomy.

Fed Chair Jerome Powell, in his post-decision press conference, reaffirmed the central bank’s inflation-fighting focus, dismissing political considerations such as mortgage relief or deficit financing. Despite his efforts to reassure markets, bitcoin (BTC) briefly dropped to $116,000, triggering more than $200 million in crypto liquidations, according to CoinGlass data. Ether (ETH), XRP, and Solana (SOL) also declined sharply before recovering.

By Thursday morning in Asia, BTC had bounced back to $118,400, while ETH traded near $3,870. The CoinDesk 80 Index rose 0.8% to 915 points.

Jimmy Yang, co-founder of Orbit Markets, said the Fed’s internal split may mark a turning point. “There’s increasing concern about the Fed’s independence as two Trump-aligned governors backed rate cuts,” Yang said. “This strengthens the long-term case for decentralized assets like crypto.”

He added that the market remains in a wait-and-see mode, with July’s inflation print likely to serve as the next major catalyst. “If tariffs push CPI higher, crypto may initially fall alongside risk assets but could rebound as inflation hedge narratives re-emerge.”

Greg Magadini, director of derivatives at Amberdata, warned that Powell’s leadership could face further challenges if political pressure intensifies. “The bond market’s biggest concern right now is Fed independence. If Powell is sidelined or forced to ease prematurely, hard assets—especially bitcoin—could surge,” he noted.

Magadini pointed out that bond markets are already responding. The yield spread between 10- and 30-year Treasuries has widened from 15 to 55 basis points since Trump’s re-election campaign gained momentum, while the 2s10s spread moved from 5 to 45 basis points—indicating rising long-term inflation expectations.

“As long as real yields remain positive and inflation stays elevated, crypto stands to benefit from skepticism around centralized monetary control,” he said.