CoinWorld news, as the US dollar weakens, the euro is seizing opportunities in the crypto economy. An increasing number of stablecoins denominated in euros are being adopted, reflecting European investors' desire to offset the drag of foreign exchange on their dollar-pegged assets. CoinShares senior researcher Luke Nolan told BeInCrypto that he expects this trend to continue, but he does not believe the dollar's role will completely disappear from the market. The dollar has hit a 50-year low. In recent months, the dollar has experienced a significant and rapid decline. In just the first six months of 2025, its performance is the worst since 1973. According to Morgan Stanley, the dollar's value against other currencies fell by about 11% in the first half of this year, the largest drop in over 50 years, ending a 15-year growth period. Unpredictable government policies, particularly regarding tariffs and trade, have undermined investor confidence in the US economy and its assets. The recently passed 'Great Beautiful Act' has intensified these concerns, raising fears about the growing budget deficit and rising national debt. These policies have led investors to shy away from US government bonds. Given the continuation of these policies, Morgan Stanley also predicts that the dollar will decline another 10% by the end of 2026. As investors shift their focus away from the notion of US exceptionalism, major competitors to the dollar, such as the euro, may benefit. This trend could be particularly evident in the cryptocurrency space. Is the dollar's dominance in European cryptocurrency about to end? The dollar's previously undisputed stability and dominance have traditionally been the foundation of the global financial system, and the cryptocurrency market is no exception. For many European investors, the recent decline of the dollar has raised a perplexing question. On the surface, a stable Bitcoin price denominated in dollars seems like a good thing. However, this masks a crucial potential monetary dynamic. This foreign exchange drag indicates why European investors are increasingly focused on currency risk. They realize that their returns are not only tied to Bitcoin's performance but are also directly influenced by the strength or weakness of the dollar. In light of this issue, European investors are taking practical steps to protect their cryptocurrency portfolios from the impact of dollar fluctuations. Offsetting foreign exchange drag. For a long time, the strength of the dollar made purchasing dollar-denominated assets attractive, providing European investors with what Nolan calls a 'win-win.' However, with the current macroeconomic shift, this dynamic has reversed. As a result, trading denominated in euros is underway. This reassessment of currency risk is also reflected in market data. According to research by Kaiko, in 2025, the popularity of trading pairs quoted in USD Tether (USDT) on European exchanges has decreased. Instead, trading denominated in euros is gaining traction. The market data provider also found that the liquidity of the ETH/EUR trading pair has doubled year-over-year, indicating that this trend is not limited to Bitcoin. For European investors, this shift is not just a strategic change but a direct response to macroeconomic forces. As Nolan points out, by trading and holding cryptocurrencies in their domestic EUR, they are striving to 'partially offset this foreign exchange drag,' thereby moving toward a more direct and lower-risk approach to participating in the digital asset market. This transition indicates that the European market is maturing, developing its own methods and infrastructure to adapt to its specific economic conditions. A new era of euro-denominated assets. The shift to euro-denominated trading has renewed focus on euro-pegged stablecoins. While they still play a small role in the cryptocurrency space, their recent growth is undeniable. These digital assets provide a way to trade on the blockchain without bearing the risk of dollar depreciation. The practical utility of these stablecoins is particularly important for professional investors and businesses. They provide a way for treasuries to hold funds in crypto assets without incurring foreign exchange risk. This ability to operate directly in euros is a major attraction. This latest trend has also raised larger questions about the long-term role of the dollar in the cryptocurrency market. Will the dollar's dominance in the cryptocurrency space weaken? The emerging trend of shifting towards euros and broader global efforts to de-dollarize prompt consideration of whether the cryptocurrency market will follow suit. According to Nolan, the outcome is nuanced and may not be as extreme as the term suggests. While the rise of euro-denominated products is significant, it is unlikely to fundamentally impact cryptocurrencies. The massive scale and dominance of dollar-denominated stablecoins continue to reinforce the dollar's global role. However, this does not mean that this trend should be overlooked. While comprehensive de-dollarization will not happen overnight, Nolan acknowledges that the market shift is clear. For example, the growth of euro-pegged stablecoins provides a concrete indicator of this change. This trend suggests that the future of the cryptocurrency market will be more diversified. While the dollar may retain its lead, the euro and other currencies will become more influential. This will create a more localized and lower-risk environment for investors and businesses.

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