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Title: The Strong Dollar Is Sinking Bitcoin’s Recovery Chances
The growth of the US Dollar Index (DXY) has been a significant hindrance to Bitcoin’s recovery. As Arman Shirinyan explains, the inverse relationship between the dollar and Bitcoin is rooted in their respective roles as store of value and hedge against fiat currencies.
Investors tend to turn to Bitcoin when they perceive the dollar as weakening or losing its purchasing power. Inversely, a strong dollar tends to push investors away from Bitcoin, making it harder for the cryptocurrency to attract new buying interest. This phenomenon has been particularly evident in recent times as the DXY rose significantly.
The correlation between the two is straightforward: when investors see the dollar strengthening, they tend to lose interest in Bitcoin and vice versa. The current situation is further complicated by the fact that Bitcoin is no longer perceived as a store of value due to its highly volatile nature.
Source: u.today
