Since March, the price of Bitcoin fell by 12%, despite the US dollar index weakening. Investors are seeking factors that could trigger Bitcoin's growth.
Dollar Index Decline and Bitcoin
Up to mid-2024, the US Dollar Index had an inverse relationship with Bitcoin's price, meaning the cryptocurrency often rose when the dollar weakened. This was due to Bitcoin being viewed as a hedge against inflation.
Past DXY Changes and Bitcoin
Julien Bittel, a macroeconomic researcher, notes that the recent drop in DXY from 107.6 to 103.60 has occurred only three times in the past twelve years. Bitcoin surged post such declines in the past, but positive effects often manifest only months later.
Expert Perspectives and Forecasts
Despite the current decline, Bitcoin's long-term prospects remain unchanged. Yield drops and trade imbalances don't undermine its fundamentals. Over time, with future monetary policies, Bitcoin might align with its 2025 level.
The recent decline in the US Dollar Index hasn't led to an expected rise in Bitcoin. However, experts remain optimistic, asserting that Bitcoin's long-term trajectory is unaffected by temporary factors, potentially reaching new highs in the coming years.
