Bitcoin ignored the investigation against the Fed chief. Did they see a "defense" in it?

During trading on January 12, bitcoin was rising in value in the moment, despite the investigation of Fed Chairman Jerome Powell, demonstrating behavior uncharacteristic of risky assets. As Barron's notes, amid pressure on the stock market, cryptocurrencies have temporarily begun to be seen as a protective instrument - along with gold. Analysts surveyed by CNBC say uncertainty is high and expect bitcoin to trade in an extremely wide price range in 2026.

Bitcoin and other cryptocurrencies were momentarily rising in the first half of the day on January 12: the digital asset market appeared to be ready to ignore the U.S. Justice Department's investigation into Federal Reserve (Fed) Chairman Jerome Powell, Barron's wrote. During the day bitcoin rose to $92,350 (up 1.6% over the last day), after - corrected and is in the red zone - and at the opening of trading in New York again went into the plus - up 0.16%, follows from the data CoinDesk. Ethereum, the second most capitalized cryptocurrency, during the day also rose above $3100 (up 1.7%), but then also turned to decline - minus 0.55% over the last day.

The S&P 500 broad market index, the Dow Jones and the Nasdaq Composite, meanwhile, began trading on Jan. 12 with declines.

So the markets reacted to the message of the head of the Federal Reserve Jerome Powell that the U.S. Department of Justice has opened a criminal investigation against him related to the reconstruction of the headquarters of the Fed and his testimony before Congress, reports CNBC. According to Powell, the investigation was the result of pressure from US President Donald Trump, dissatisfied with monetary policy, and could be a test of the Fed's independence.

Analysts at CNBC warn of the risk of a "sell America" scenario - a weaker dollar, weaker stock market and increased demand for protective assets, including gold.

Against the backdrop of the situation around the Fed, cryptocurrencies, as Barron's notes, - at least in the moment on January 12 - behaved as protective assets - similar to gold - rather than following other risky instruments. The publication emphasizes that this reaction is markedly different from the behavior of the crypto market in recent months.

Bitcoin is still trading about 28% below its all-time high of more than $126,000, a level it reached in early October 2025. Following that record and bitcoin's sharp drop in 2025, market participants speaking to CNBC suggested that the cryptocurrency could renew its highs in 2026, but the path to them is likely to be accompanied by high volatility. In an annual review of bitcoin forecasts published in early January, CNBC experts outlined a wide range of possible prices in 2026 - from $75,000 to $225,000.

Carol Alexander, professor of finance at the University of Sussex, estimates that in 2026 bitcoin will remain in a high volatility zone in the $75,000-$150,000 range, with a "center of gravity" around $110,000. This is because historically the price of bitcoin has been shaped by retail traders, but the role of institutional participants has increased markedly in the past two years.

James Butterfill, head of research at CoinShares, expects bitcoin to trade in the $120,000-$170,000 range in 2026, with more sustained growth possible in the second half of the year. Investors, he said, will be keeping an eye on who will lead the Fed after Jerome Powell's term ends, as well as the fate of the Clarity Act bill, which is supposed to form a regulatory framework for digital assets.

Bit Mining Chief Economist Yuwei Yang also expects bitcoin prices to remain highly volatile and assumes a wide range of fluctuations in 2026 - from $75,000 to $225,000. The market may be supported by lower interest rates and softer regulatory policies, but macroeconomic and geopolitical risks will remain a key source of uncertainty.

This article was AI-translated and verified by a human editor