The Drop in the Dollar (DXY) Didn’t Boost Bitcoin This Time! JPMorgan Explains Why!

While there are many analyses regarding Bitcoin’s weak performance, its inability to recover, and the reasons behind it, the latest assessment comes from JPMorgan.

At this point, JPMorgan analysts said that Bitcoin, unusually, did not show an increase in parallel with the decline in the US dollar.

Analysts say the reason for this is that most market participants do not see Bitcoin as a hedge against dollar risk.

According to analysts, while gold and other precious metals are rising as the dollar weakens, Bitcoin is lagging behind because markets continue to view it as a liquidity-sensitive, risky asset.

Speaking to CoinDesk, Yuxuan Tang, JPMorgan’s head of Asia macro strategy, said that a weak DXY is usually positive for risky assets like BTC, but this time that wasn’t the case.

Because while the DXY fell by 10%, Bitcoin dropped by 13%. Tang said, “This means the market perceives BTC not as a reliable hedge against the dollar, but as a liquidity-sensitive asset.”

Tang also added that many investors looking to move away from the dollar are opting for assets such as gold or emerging market equities.

JPMorgan analysts and Tang concluded that Bitcoin still functions more as a liquidity-sensitive risk asset than a default store of value, and that without a clear change in future monetary policy, it will be difficult for Bitcoin to keep pace with the market rally.

*This is not investment advice.

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