Well, well, if it ain’t the S&P 500, slippin’ down by a good 1% on this fine Feb. 20! And just like a bad penny, the US dollar has decided to join the party with a tumble, dipping to its lowest depth in seventy days. Now, it appears that over the past six months, Bitcoin (BTC) has gotten cozy with the US Dollar Index (DXY), prompting traders to wonder if a big ol’ correction is just around the bend. 🤔
Connecting the dots between the DXY Index and Bitcoin’s whimsical price dance is like trying to lasso the wind. Sure, both donned their party hats and boogied between September 2024 to January 2025, but maintaining that merry momentum has proven trickier than teaching a cat to fetch.
Now, some so-called experts are waving the banner of fiscal discipline, claiming President Trump’s election has put the kabosh on wild spending. But hang onto your hats, folks! Recent figures, whether tied to the old administration or not, scream ‘stagflation’ as inflation in the US persists and retail sales take a nosedive. 🎢
Why, it’s too soon to tell how that mash-up of import tariffs and the ol’ government purse strings will play out, though Larry Adam from Raymond James seems to think it’ll stumble along with a possible 0.6% hit to US GDP growth. And what’s worse, he warns inflation could take a toast with a 0.5% uptick! Now, that ain’t exactly music to the ears for Bitcoin investors who like living on the edge. 🕺
DXY Index puts the squeeze on Bitcoin’s price, but hold your horses!
On this fateful day, U.S. Treasury Secretary Scott Bessent declared the government isn’t just itchin’ to issue more long-term debt. “That’s a long way off,” he said, as if he were preparing for a leisurely stroll through the countryside. Despite earlier ribbing directed at Janet Yellen for short-term love, it seems the previous administration’s approach remains as stubborn as a mule.
Bessent, with a furrowed brow, expounded that any shift to long-term bonds hangs by a thread of market conditions and inflation trends, with a particular nod to “Bidenflation.” More troubling still, he hinted it would be “easier for me to extend duration when I’m not dancing” with the US Federal Reserve, who’s been foxtrotting away with government bonds like they were hotcakes.
This positive tango with the DXY Index puts pressure on Bitcoin’s price, resembling a pressure cooker on the verge of blowing its top! Yet, investors might just see Bitcoin as something less risky and more akin to ‘digital gold’ as states across the union let Bitcoin enter their fancy legislative ballroom.
Just the other day, Montana’s Business and Labor Committee decided to create a special little account for fine investments like Bitcoin and precious metals. And not to be left out, states like Utah, Arizona, and oh-so-many others are knocking on the doors of Bitcoin reserve status! 🎉
Bitcoin is struttin’ its stuff, breaking above $98,000 on Feb. 20, like it’s just picked up a golden ticket! Investors are starting to nod toward the hard monetary policy over the façade of the US government possibly tossing out a bunch of $5,000 checks, should Elon Musk’s crew pull off its money-saving magic tricks. 🎩
Caution is the name of the game as reflected in gold’s fancy new all-time high recently. Instead of fixating on how the US dollar waltzes with other currencies, traders oughta pay attention to how nation-states shimmy with Bitcoin. 🇨🇿 Czech National Bank’s big cheese, Aleš Michl, underscored the necessity of exploring Bitcoin’s potential as a reserve asset.
At the end of the day, Bitcoin’s dream of soaring higher depends on those elusive ETF inflows, the golden goose of institutional investors—which has been running away for the last couple of days, tallying up a whopping $125 million in net outflows, per data from Farside Investors. Talk about adding insult to injury!
This little missive is a friendly chat and should not be treated as Bible verses for legal or investment guidance. The musings shared here are strictly the author’s and may not reflect the opinions of CryptoMoon even if it wanted to shake hands! 👋
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2025-02-21 00:21