US Dollar Weakens Sharply — What This Means for Bitcoin’s Next Big Move

The U.S. dollar is sliding fast—and for Bitcoin (BTC), this could be a bullish signal. Market experts are noting a sharp decline in the U.S. Dollar Index (DXY), fueling hopes that BTC may be on the cusp of another parabolic rally as capital seeks refuge in hard assets.

DXY Collapse Signals Possible Shift in Market Dynamics

The U.S. Dollar Index (DXY), which measures the greenback’s strength against a basket of major currencies, has plummeted over 11% year-to-date—marking its worst annual performance in four decades. Ted Labs co-founder Niels commented on X that the dollar “has entered free-fall mode,” and added that the U.S. government could drive it even lower by lifting the debt ceiling by an additional $5 trillion.

This weakening trend is supported by rising expectations of a Federal Reserve rate cut. The CME FedWatch Tool now indicates a 19% chance of a 25 basis point cut at the July 30 meeting. DXY is currently hovering just above 97—its lowest level since February 2022.

Macroeconomic pressures, including elevated M2 money supply, trade policy uncertainty, and Middle East instability, are all contributing to the dollar’s decline. Bitcoin advocate Anthony Pompliano weighed in, asserting that persistent money printing will only push asset prices higher. “They can’t stop printing money, so asset prices can’t stop going up,” he said. In his view, holding dollars or bonds is a financial misstep amid such devaluation.

The more money they print, the higher asset prices go.

They can’t stop printing money, so asset prices can’t stop going up over the long run.

The only major financial sin you can commit is saving in dollars or bonds. Both get devalued away.

Everything else benefits for the…

— Anthony Pompliano 🌪 (@APompliano) June 28, 2025

BTC Historically Rallies During Dollar Weakness

Historically, Bitcoin has thrived during periods of dollar weakness. In 2017–2018, the DXY fell nearly 15%, coinciding with Bitcoin’s first parabolic rally. A similar pattern emerged from March 2020 to mid-2021, when the index dropped around 13% while crypto markets soared to new all-time highs.

With the DXY already down nearly 12% in 2025, the conditions are beginning to mirror those earlier bull market cycles. Analysts suggest that the ongoing dollar slump could be a major tailwind for BTC as the four-year cycle approaches its next peak.

Institutional voices are echoing the sentiment. Fidelity’s Director of Global Macro, Jurrien Timmer, recently observed that weakening confidence in U.S. bonds and the dollar points to a changing financial regime—one in which assets like Bitcoin and gold could emerge as new safe havens.

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