Bitcoin has experienced significant volatility over the past week as traders navigate the ups and downs of U.S. President Donald Trump’s tariffs, alongside a startling alert from Michael Saylor’s Strategy.
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The price of bitcoin remains resilient after the latest tariff provocations from Trump and China, despite a nosedive alongside stock markets in early April—while Wall Street faces an impending “existential threat” from cryptocurrency.
Currently, as traders anticipate a potential shift from the Federal Reserve, the bitcoin price is poised for a confidence crisis in the dollar, following a steep decline in the ICE U.S. dollar index that marked its worst day since 2022.
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U.S. President Donald Trump is facing a deepening crisis of confidence in the U.S. dollar, which some … More
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“The issue of a potential dollar confidence crisis has now been overwhelmingly confirmed—we are indeed in the midst of one,” wrote ING analysts including Francesco Pesole in a note reviewed by Bloomberg. “The dollar’s decline serves as a reflection of the current sentiment to ‘sell America.’”
The intensifying global trade conflict instigated by Trump has led to a sharp decrease in the ICE U.S. Dollar Index, which tracks the U.S. dollar against various other currencies, which has recently fallen below the 100 mark, approaching its 2022 levels.
“The market is reevaluating the underlying attractiveness of the dollar as the world’s primary reserve currency, entering a phase of quick de-dollarization,” remarked George Saravelos, Deutsche Bank’s global head of FX research, in a note accessed by City AM.
The dollar’s downturn is perceived by some as a boost for bitcoin, as traders speculate that bitcoin could mirror gold’s performance as a safe haven asset.
“The falling dollar is supporting other assets, much like a rising tide,” said Alex Kuptsikevich, the chief market analyst at FxPro, in email remarks, adding “a depreciating dollar is beneficial for cryptocurrencies.”
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Although the bitcoin price has decreased from its peak in recent weeks, it has still outperformed the … More
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“Bitcoin’s correlation with U.S. equities might have received undue emphasis, whereas its relationships with Federal Reserve policy and the trajectory of the U.S. dollar require more attention,” remarked Joel Kruger, a market strategist at LMax Group, via email.
Trump has been urging Fed Chair Jerome Powell to lower interest rates as he continues his global trade initiatives, stoking speculation that the Fed may need to cut rates through 2025, whether in response to trade-induced economic slowdowns or following the potential dismissal of Powell by Trump.
“Market dynamics are evolving alongside the Fed’s response to pressures from U.S. trade policy, with expectations for more pronounced rate cuts in 2025 gaining traction. This shift towards a more accommodating monetary stance is likely to diminish yield differentials, undermining the dollar’s appeal and concurrently creating an advantageous environment for bitcoin,” Kruger added.
