Analysts indicate that in the recent Iran-Israel conflict, the dollar has not demonstrated its usual safe-haven strength, while Bitcoin (BTC) has continued to rise as it attempts to challenge its historical high of $111,970 once again.
Macroeconomist Lyn Alden stated in a post on Wednesday, "The Dollar Index (DXY) hit a new low for this cycle today. There has been almost no safe-haven demand over the past few weeks." Alden added.
Real Vision cryptocurrency analyst Jamie Coutts expressed a similar view, stating that "fiat currencies are in decline." The Dollar Index (DXY), which measures the strength of the dollar against major global currencies, is currently at its lowest point since February 2022, trading at 97.50 according to TradingView data at the time of writing.
This level is close to that of June 13, when Israel launched airstrikes against Iran, marking the first escalation of tensions.
In such situations, market participants typically expect funds to shift from riskier assets like cryptocurrencies to safer options such as the dollar or government bonds. In October 2024, Iran launched large-scale missile attacks on multiple locations in Israel, causing the DXY to surge by 2.67% within a month.
Despite the dollar not soaring in the recent conflict, Bitcoin (BTC) has experienced volatility.
On Sunday, Bitcoin's price briefly fell below $100,000 for the first time since early May. However, since the fragile ceasefire agreement by U.S. President Trump took effect on Monday, Bitcoin's price has rebounded, trading at $107,930 according to CoinMarketCap data at the time of writing.
Cryptocurrency analyst Matthew Hyland stated that "bulls are in control," while others noted that despite the recent market being in a risk-off state, Bitcoin still shows strong resilience.
Cryptocurrency analyst Rekt Capital stated on Wednesday, "Over the past month, Bitcoin has broken through two two-week downtrends."
Coutts from Real Vision compared the current macro environment to the early 2000s when the weakening dollar led to a shift of funds towards emerging markets and commodities.
Coutts said, "If you remember from 2002-2008, the last time the dollar significantly depreciated, it ignited a boom in emerging market stocks and commodities."
He added, "Emerging markets outperformed developed markets by three times, as funds chased high-growth young economies—leading to the rise of BRICS." He also pointed out that the new emerging market is cryptocurrency:
"Cryptocurrency is today's emerging market. Funds are flowing to vibrant places," he said.
Related: Bitcoin (BTC) bulls dominate, targeting $110,000 as they face $20 billion in monthly options expiration.
This article does not contain investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Fiat currencies are in decline” — Dollar hits 3-year low, Bitcoin (BTC) breaks $107,000 again
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