Falling DXY part of US financial system’s ‘long-term transition’ — Will Bitcoin continue to shine?
The US Dollar Index has declined 11% since early 2025, reflecting potential long-term changes in the US economy and global monetary order. Analysts suggest that a weaker dollar may be necessary for economic stability, as the US economy holds $102 trillion in dollar-denominated debt against only $5.8 trillion in base money. The US's role in the financial system requires running trade deficits, which may lead to a controlled retreat from dollar dominance. Bitcoin and the dollar are inversely correlated; a weakening dollar could enhance Bitcoin's appeal as an alternative currency. Investment strategies are shifting towards neutral assets like gold and Bitcoin, with several nations and entities increasing their Bitcoin holdings. The trend of "de-dollarization" is gaining momentum, with more international trade being settled in currencies other than the dollar.
