On January 29, the U.S. Dollar Index (DXY) experienced a 10% decline over the past year, yet Bitcoin did not rise as it typically does when the dollar weakens, instead falling by 13% during the same period. According to BlockBeats, strategists from JPMorgan Private Bank suggest that the current dollar weakness is driven by short-term capital flows and market sentiment rather than changes in growth or monetary policy expectations. Despite favorable interest rate differentials for the dollar since the beginning of the year, Bitcoin has not acted as a typical hedge against dollar fluctuations.
JPMorgan analysts argue that the market does not perceive the current dollar decline as a lasting macroeconomic shift, leading Bitcoin to be viewed more as a liquidity-sensitive risk asset rather than a reliable store of value. In contrast, gold and emerging market assets have become more direct beneficiaries of dollar diversification.
