Morgan Stanley claims that the weakness of the US dollar is driven by short-term sentiment, and Bitcoin is still considered a risky asset

JPMorgan Private Bank stated that despite a 10% decline in the US Dollar Index (DXY) over the past year and an increase in hard assets such as gold due to the weakness of the US dollar, the price of Bitcoin has fallen by 13%. The institution believes that the weakness of the US dollar is mainly driven by short-term capital flows and market sentiment, rather than changes in economic growth or monetary policy expectations. The market does not consider the decline of the US dollar as a persistent macro change, and Bitcoin is still seen as a liquidity sensitive risk asset rather than a reliable hedge against the US dollar. In contrast, gold and emerging market assets have become the preferred beneficiaries of US dollar diversification.