JPMorgan: Weakening of the US dollar failed to boost Bitcoin, as the market still views it as a liquidity-sensitive risk asset

BTC1,76%

ChainCatcher news, according to CoinDesk, although the US Dollar Index (DXY) has fallen 10% over the past year, Bitcoin has not risen as usual with the weakening US dollar, but has fallen 13%. JPMorgan Private Banking strategists explained that the current weakening of the US dollar is mainly driven by short-term capital flows and market sentiment, rather than changes in growth or monetary policy expectations. The dollar interest rate differential has actually favored the dollar since the beginning of the year, which has caused Bitcoin to fail to behave as a typical dollar hedge.

Analysts believe that since the market does not see the current decline in the dollar as a lasting macro shift, Bitcoin is still seen as a liquidity-sensitive risk asset rather than a reliable store of value. In contrast, gold and emerging market assets emerged as more direct beneficiaries of dollar diversification.

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