美元贬值

DXY Weakness Triggers Capital Shift, Crypto Market May Welcome a New Round of Growth

On Wednesday, the Dollar Index (DXY) plummeted to 97.2, marking its lowest level since 2022, which has also led analysts to anticipate a significant shift in capital towards BTC and cryptocurrencies.

In the context of continued DXY weakness, investors are actively responding to macroeconomic uncertainties and preparing for a generational shift in digital assets.

According to Barchart data analysis, the Dollar Index (DXY) is expected to depreciate by over 10% by 2025, marking the worst performance in the first half of a year in nearly 40 years. This rapid depreciation phenomenon has drawn comparisons to past market cycles, where the decline in DXY triggered strong rebounds in other markets.

Jamie Coutts, Chief Crypto Analyst at Real Vision, pointed out that the depreciation of the dollar from 2002 to 2008 propelled emerging market (EM) stocks and commodities to surge, outperforming developed markets (DM) by three times.

Now, the cryptocurrency market is rising like the emerging markets of twenty years ago. Therefore, the weakness of global fiat currencies positions digital assets as the next frontier for growth.

Coutts' view is also supported by analysts Mister Crypto and Chainbull, and the recent decline in DXY alongside the stabilization of Bitcoin's dominance suggests that an altcoin season may be approaching.

Meanwhile, with Bitcoin's dominance recently reaching an annual high, it has sparked investor skepticism about the enthusiasm for altcoins. However, as traders' expectations of dollar weakness increase, the trend of capital flowing into small-cap tokens may quickly disrupt the current landscape.

The market generally believes that the overall trend of the cryptocurrency market usually has an inverse relationship with the strength of the Dollar Index (DXY). When DXY weakens, borrowing costs decrease, liquidity increases, and investors' risk appetite rises, creating favorable conditions for digital assets. If this trend continues, capital may flood into the crypto market, mirroring the prosperity of emerging markets in the early 21st century.

In summary, with the synergy of macro factors, historically similar trends, and on-chain as well as real-time signals, a significant rebound in cryptocurrencies may have already begun.

Ultimately, whether it's the arrival of altcoin season or Bitcoin regaining a strong trend, the decline of DXY is reshaping investors' preferences for risk assets, and cryptocurrencies may significantly benefit from this.

#美元贬值 .6 trillion US debt maturing#
In June, several trillion dollars in debt will mature, and the unreliable one is trying various methods, including raising tariffs, to no avail.
Raising tariffs is meant to force China and Japan to continue buying US low-interest Treasury bonds. This is known to both China and Japan, and neither side is willing to back down.
So, the only option left is a decline in credit and a significant depreciation of the dollar.
What does a significant depreciation of the dollar mean for the cryptocurrency world? Does it force the Federal Reserve to cut interest rates significantly?