Is the Dollar Era Ending?

Bank of America analyst Michael Hartnett suggests that the recent weakness in the dollar isn't just a temporary setback — it's a warning sign of the beginning of the end for American dominance.

Since the 2008 financial crisis, the U.S. share of the global stock market has surged from 40% to 67%. At the start of 2024, most investors remained confident in the continued supremacy of American assets, largely overlooking the risks of a potential recession, an extended bear market, and a growing trade war.

However, the landscape is starting to shift. Since the beginning of the year, we've seen rising interest in alternative markets, such as the Chinese AI leader DeepSeek and other emerging economies.

This trend reflects a broader "liberation of capital" globally — a movement that could spark a new, long-term bearish phase for the dollar and challenge America's leadership in the world economy.

Historical cycles of world reserve currencies back this perspective. Over the past 500 years, global currency dominance has rotated approximately every 80–100 years: from the Spanish real to the Dutch guilder, then the British pound, and finally, the U.S. dollar.

Given today’s geopolitical and economic shifts, it seems increasingly likely that the dollar’s era as the world's unrivaled currency may be nearing its end.