The US dollar lost more ground on Thursday and hit a wide range of currencies as Bitcoin surpassed $111,000 for the first time.
The decline in greenback has renewed doubts about whether foreign investors are still willing to fund American debt following Washington’s political turmoil and a failed bond auction.
Immediate pressure has created immediate pressure from 20 years of Treasury bond sales at far higher prices than the expected market, forcing yields to spike and sinking confidence.
The Treasury sold $16 billion on 20-year bonds at a yield of 5.047%. By the end of the auction, yields on these bonds were at their highest since November 2023, indicating how badly demand has fallen.
It hit the dollar violently. The euro rose 0.4% to $1.1334, touching the two-week high, with the yen bringing similar profits. The failed auction shows that buyers are demanding large returns to hold their long-term US debt, and uncertainty about Washington’s finances is widespread.
Republican inboard stall tax bill as foreign capital sets back
The Bond auction flops like President Donald Trump didn’t win support from Republicans on the controversial tax bill. Trump met with House Republicans on Tuesday to push forward the law aimed at lowering taxes, but he didn’t convince him of holding out.
House Speaker Mike Johnson said the hardliners still refused to support the plan, and insisted that they would not cut government spending sufficiently to justify the addition of the deficit. Non-partisan analysts estimate that the bill will add to national debt between $3 trillion and $5 trillion.
Foreign investors have seen this play and are backing down. Traders now believe that US officials are deliberately falling the dollar to support trade negotiations happening on the sidelines of groups of seven financial meetings in Canada.
At the same time, Trump’s global tariff campaign suddenly became silent. The temporary 90-day break on new trade barriers is almost over, with no new deals. This silence raises more questions than answers about the future of US trade policy, and markets are tense as clocks dry up.
Bitcoin explodes record highs as ETFs draw out massive influxes
Bitcoin was flying while the dollar was sinking. Cryptocurrency has surged to over $111,000, continuing its rally, which began just 48 hours ago. On Monday, Bitcoin already cleared $106,000, finds support for around $105,200, then took off again, beating the previous all-time high of $109,588, set on January 20th.
Analysts pointed to macro pressures such as slow dollar performance, rising bond yields and political uncertainty as key reasons for Crypto’s traction.
ETF flow backed up that. On May 21, the Spot Bitcoin ETF recorded a net inflow of $609 million. Ethereum also took up steam, while the spot ETF brought in $587,100 over four days.
Wall Street has also begun relocating. Morgan Stanley has raised its outlook for most US assets and has moved to “overweight” both in the equity and the Treasury Department. Their analysts pointed to lower risk of recession and opportunities for interest rate reductions.
But they chose the dollar as an exception. In a memo sent Tuesday night, the company wrote that it hopes the dollar will continue to weaken, citing “a convergence of US fees and growth into peers.” The message was clear. US investments could be great, but the dollar is not outweighed.
Banks also reduced global GDP growth forecasts. They currently expect the output to slow from 3.5% in 2024 to 2.5% by the end of 2025. Even without a full-scale recession, that kind of slowdown is sufficient to move towards Crypto, which many investors consider to be a hedge against Fiat’s instability.
If Bitcoin continues, the next target is already on the radar: $120,000. No major resistance levels are visible, influxes are rising, traditional markets wobbling, and more buyers line up.