Bitcoin rallied 3% on Monday, climbing above $87,500 as markets responded to growing tensions between U.S. President Donald Trump and Federal Reserve Chair Jerome Powell. The political standoff is boosting investor expectations for lower interest rates — a scenario that typically supports risk assets like cryptocurrencies.

The renewed speculation over Fed policy comes after Trump publicly criticized Powell’s leadership, suggesting rates should be cut more aggressively. White House economic adviser Kevin Hassett added that the administration is “studying the matter” when asked whether replacing Powell is an option. Powell, in response, reaffirmed the central bank’s legal independence, noting that the Fed chair can only be removed “for cause.”

Cryptocurrencies are highly sensitive to rate expectations, and with growing odds of monetary easing, Bitcoin and its peers saw renewed investor interest. Ethereum also posted modest gains, rising about 3%, though it remained largely range-bound in the mid-term.

Market activity surged alongside price gains. Total crypto trading volume rose by 40% on the day, with over $70 billion in digital assets exchanged, signaling strong trader engagement amid policy uncertainty.

Bitcoin’s move marked a three-week high, reaffirming its sensitivity to macroeconomic dynamics, particularly those affecting U.S. monetary policy and risk sentiment.