The American dollar is showing a sharp decline at the beginning of 2025, raising concerns among analysts. The reasons behind this fall and its impact on the US economy have become a topic of discussion.
Poor performance of the dollar
The index measuring the dollar's value against six other currencies has fallen by 10.8% in the first half of 2025, marking the worst performance since 2009. The dollar is losing value amid expectations of interest rate cuts by the US central bank, while the euro has experienced a 13% growth.
Reasons behind the dollar's decline
Despite no high-scale military conflict, the dollar is facing challenges comparable to the Bretton Woods crisis of 1973. Key factors influencing the dollar's decline include the ongoing trade war and the ever-growing federal debt, which may increase by $2.4 trillion with the passing of new legislation.
Do cryptocurrencies influence the dollar?
Some experts suggest that cryptocurrencies such as Bitcoin may gradually undermine trust in the dollar. Bitcoin shows significant growth in value, becoming an alternative asset for investors. However, currently, the trading volume in cryptocurrencies is not critically significant enough to impact the dollar significantly.
Thus, the US dollar faces numerous challenges from both internal economic factors to global changes in perceptions of money. Despite the challenging situation, its role as a reserve currency remains intact for now.
