The US Dollar Index (DXY) hit its lowest level since October 2024. This drop was triggered by President Trump’s imposition of “Liberation Day” tariffs. The sudden decline raised concerns about the stability of the dollar. It also sparked speculations about Bitcoin’s future performance.
The DXY, the index of dollar strength against significant currencies, fell on recession worries and rising trade tensions worldwide. The DXY had reached a record high two years earlier in January. However, it dropped nearly 4% in the first quarter of 2025.
Economist Peter Schiff pointed out that a depreciating dollar would increase the financial burden on consumers from tariffs. It would not reduce it. His warning comes after President Trump announced a minimum 10% tariff on imports, raising fears of a trade war.
A Reuters report confirmed the dollar’s decline against the yen, while the euro rose 0.3% to trade at $1.08. Meanwhile, some analysts believe Bitcoin could benefit from the dollar’s struggles.
Ciara Sun, founder of C² Ventures, further explained that potential Federal Reserve rate cuts in 2025 would also continue to weaken the DXY and push up Bitcoin. BitMEX former CEO Arthur Hayes also predicted a strong Bitcoin upswing, envisioning it could reach $250,000 should the Fed resort to Quantitative Easing (QE).
Despite this optimism, Bitcoin is currently under pressure, dropping 1.5% to $83,389 in the past day. The broader crypto market also fell, with total capitalization down 3.4%.
