Written by: Tuo Luo Finance
Trump has finally taken action against the Federal Reserve.
Overall, this is clearly a signal of "softening," and it can be considered that a rate cut in September has become a foregone conclusion. The market's reaction was very direct; on that day, all three major U.S. stock indices closed higher, with the Dow Jones up 1.89%, the S&P 500 up 1.52%, and the Nasdaq up 1.88%. Even the often-criticized A-shares rose over 3,800 points, and the market echoed with the sounds of a bull return. The chain reaction was also very evident, with the crypto market not lagging behind; BTC rebounded to $117,000, and ETH performed spectacularly, breaking through $4,800 on that day and setting a new historical high of $4,956 on August 25.
As for whether the reasons are valid, we need to pull the timeline back to last week. Also on social media, Bill Pulte, the director of the Federal Housing Finance Agency, accused Cook of declaring two properties as his primary residence to obtain more favorable interest rates and stated that he had submitted this accusation to the Department of Justice. What seems like a minor property interest rate issue has stirred up quite a mess under Trump's relentless efforts. Following this incident, Trump immediately retweeted the report and bluntly stated, "Cook should resign immediately." Subsequently, Cook responded on social media, stating that he would never resign due to bullying.
Questions naturally arise: why Cook? Does Trump actually have the power to fire him? From a legislative perspective, although it is difficult for the president to dismiss someone to ensure the independence of the Federal Reserve, this power does indeed exist. The Federal Reserve Act stipulates that the terms of Federal Reserve Board members are long-term and fixed, and the president can only remove them for "just cause." This just cause is relatively vague, as no one has attempted such actions for many years, but rationally speaking, serious misconduct or moral issues could be one of the reasons.
It is evident that the internal structure of the Federal Reserve is very stable, but this structural stability has a natural shortcoming: a lack of flexibility and adaptability, as everything is based on data. This characteristic, maintained by the Federal Reserve for many years, has made Trump very dissatisfied; however, the objective existence of long terms makes it difficult for him to intervene quickly, leaving him struggling to balance policy advocacy and inflation. Previously, Trump had criticized Powell multiple times for not cutting interest rates, and after trying various methods without success, it was logical for him to shift his focus to the board members. Cook, who is already "not from my party" and has been caught in a scandal, became the preferred target for political maneuvering, attempting to use Cook's case to intimidate the board. In fact, "mortgage fraud" is not a new issue; several members of the Democratic Party have also received investigations from the Trump administration.
In terms of capital flow, it seems that more funds are moving from BTC to ETH. On the day of the sharp drop, about $2 billion in Bitcoin funds were reallocated to Ethereum, indicating that capital has a more positive outlook on ETH. Institutional buying operations are also continuing; the leading ETH coin stock BitMine received 131,736 ETH from three institutional business platform addresses, including BitGo, Galaxy Digital, and FalconX, in the past 12 hours.
From the perspective of unlocking, to maintain price stability, early supporters have only unlocked 20%, while the remaining 80% will be decided by the community through governance voting. It is worth noting that the tokens of the founding team, advisors, and partners will not be unlocked upon listing. From the current pre-market contracts, WIFI has already dropped to $0.26 after surging to $0.55. Although there is still significant room for growth compared to the early purchase prices of $0.015 and $0.05, under the current circumstances, WIFI's fully diluted valuation is only $26 billion, which can only be described as mediocre. Although the founding team will not unlock immediately upon listing, it is not uncommon for contract hedging to realize value in advance.
It can be anticipated that by September 1, Trump's calls and promotions will not be few, but whether this move will suck liquidity dry like Trump or provide benefits to the public remains to be seen. It is more likely that Trump will release new positive news for this crypto garden that can be withdrawn at any time on September 1.
Looking solely at crypto, with the U.S. stock market pulling it along and policies supporting it, the independent market for crypto has gradually drifted away. However, whether internally or externally, it seems to be closely related to Trump. Ultimately, it must be acknowledged that with the continuous politicization of the crypto market, Trump and the crypto world have long been two sides of the same coin.
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