The Dollar Drops, But Bitcoin Stays Flat: A Mystery Unfolds

“The Dollar Drops, But Bitcoin Stays Flat: A Mystery Unfolds ”

Alas, dear friends, the price of Bitcoin (BTC) has fallen 12% since that fateful day, March 2, when it dared to approach the lofty sum of $94,000. And what’s more, the US dollar, that stalwart of stability, has weakened against a basket of foreign currencies, a development that should, by all accounts, have sent Bitcoin soaring like a bird set free from its cage .

But no, dear reader, the price of Bitcoin remains stubbornly flat, like a stone cast into a pond, creating ripples of confusion among investors. What sorcery is this? Why does Bitcoin, that most noble of cryptocurrencies, refuse to react to the declining DXY Index?

Up until mid-2024, it seemed as though the US Dollar Index and Bitcoin were bound together like two peas in a pod, each moving in inverse harmony. But, alas, correlation does not imply causation, and the past eight months have revealed that the rationale for investing in Bitcoin is as changeable as the wind .

Some analysts claim that Bitcoin’s price aligns with global monetary supply, while others see it as a beacon of freedom, shining brightly like a lighthouse in the darkness . And so, we are left to ponder the mystery of why Bitcoin has failed to react to the DXY Index’s decline.

Bitcoin’s Price May Take Months or Years to Materialize

Julien Bittel, that wise and venerable sage of macro research, has pointed out that the recent drop in the US Dollar Index has occurred only three times in the past twelve years. Ah, but what a difference those three times have made!

Bittel’s wise words on X highlight that Bitcoin’s price has surged after past significant drops in the DXY Index, like a phoenix rising from the ashes . And yet, we must not be fooled by short-term macro fears, for they are but a mere tempest in a teapot .

The analyst @21_XBT has weighed in on the matter, citing various reasons for Bitcoin’s recent price weakness, including tariffs, Doge, and Yen carry trade. But fear not, dear reader, for none of these factors alter Bitcoin’s long-term fundamentals, which will eventually shine brightly like a beacon in the darkness .

For example, the US Department of Government Efficiency’s (DOGE) cuts are a boon for the economy in the medium term, reducing debt and interest payments, freeing up resources for productivity-boosting measures. And tariffs, ah, tariffs! They may prove beneficial if the Trump administration achieves a more favorable trade balance, paving the way for sustainable economic growth .

The measures taken by the US government have trimmed excessive but unsustainable growth, causing short-term pain while lowering yields on US Treasury notes, making it cheaper to refinance debt. But fear not, dear reader, for there is no indication that the US dollar’s role as the world’s reserve currency is weakening, nor is there reduced demand for US Treasurys .

Over time, as user @21_XBT noted, macroeconomic fears will fade as central banks adopt more expansionary monetary policies to stimulate economies. And when that day arrives, Bitcoin will decouple from the DXY Index, setting the stage for a new all-time high in 2025 .

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of CryptoMoon .

2025-03-17 23:42

Bitcoin’s Price May Take Months or Years to Materialize

Read More