Bitcoin is solidifying near historic highs as the US dollar has fallen to its weakest level in over three years, shining the spotlight on the vulnerable dance between crypto prices and the world’s dominant reserve currency.
As of Friday morning in London, Bitcoin was traded $107,639which rose by about 9.8% since the beginning of the year and 6% from last week. The world’s largest cryptocurrency remains its highest ever $111,900 Set for May 21st. on the other hand, US Dollar Index (DXY) I slid 97.10Mark a It’s down 10% every year And it spurs speculation about how much more dollars will fall.
The dollar slide is in a swirl of macroeconomic forces. The expectations of a loose Federal Reserve policy, signs that easing trade tensions between the US and China, and growing concern that political pressure could undermine the Fed’s independence.
These dynamics are reviving the appeal of Bitcoin as a hedge against the collapse of the dollar and traditional financial volatility, analysts said.
Vasileios Gkionakis, senior economist and strategist at Aviva Investors, commented on Reuters.
“I don’t think it’s just a Fed re-rick. Here’s a broader problem with some of the discoloration of US exceptionalism.”
Currently the market is priced around 64 basis points The remaining rate cuts for 2025 increased from the expected 46 basis points just a week ago. There is also speculation that President Donald Trump could set up a more incredible Fed chairman if he perceives financial tightening as a resistance to economic growth heading into the next election cycle.
At the same time, diplomatic progress seems to calm global nerves. News of the rare earth trade agreement between Washington and Beijing lifted shares around the world this week. Pan-European Stoxx 600 The index rose 0.9% that day and was ready to earn a profit of 1.1% each week, but the Asian market has surged to its highest level in over three years.
Despite the Bitcoin rally, some analysts warn that the correlation with the dollar is not entirely reversed. Data from Cryptoquant show that there is less statistically significant negative correlations below minus 0.6. 30% of trading dates since 2021. Currently, the 90-day rolling correlation between BTC and DXY is –0.34suggesting a loose but prominent relationship.
Opinions divergence regarding the outlook for Bitcoin
Some view the dollar decline as a tailwind for Bitcoin. Digital Asset Manager Keeps Bitwise $200,000 BTC’s year-end price target argues that deliberate weakening of the dollar could push more capital to valued alternatives.
Others remain skeptical. While businesses, institutions and government agencies currently acquire or hold Bitcoin, on-chain activity is not close to the level of 2021. The active wallet, Lightning Network volume, and transaction numbers are all reduced. Bitcoin in 2025 is not something that every day individual uses it for payments or acquisitions. Instead, we see the transfer of value from retail users to institutions with a key focus on the US.
Bitcoin prices are not necessarily threatened by this on-chain indifference. But if Bitcoin is just a place where the wealthiest businesses and individuals in society park their wealth, are we really doing justice to Satoshi’s legacy? “Several Go Up” is great for everyone who bought Bitcoin early, but should “Freedom Money” really be saved up in a billionaire class?
Unresolved questions
Evolving BTC – USD Stories don’t solve important questions:
- What level of DXY, which has historically caused a massive Bitcoin movement, will decline?
- Are US companies adding Bitcoin to the Treasury as a dollar hedge?
- Can a sharp rebound in the dollar cause a sale of Bitcoin?
- Does Stablecoin reflect changes in dollar sentiment, like USDT and USDC?
For now, investors are closely watching the dollar trajectory and the next move in the Federal Reserve will shape the Bitcoin story in the second half of 2025.
Important numbers (as of June 27, 2025):
- BTC Spot Price: $107,639 (▲9.8% YTD, ▲3.1% per month)
- Best in BTC history: $109,482 (May 21, 2025)
- US Dollar Index (DXY): 97.10 (▼10.0% Ytd, ▼2.3% monthly)
- BTC – DXY 90 Days Correlation: –0.34
The greatest Bitcoin ever appeared on Cryptoslate, up to a low of around three years.