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- Dollar slides nearly 11% in 2025 as investors flee uncertainty from Trump trade and tax moves.
- Bitcoin nears breakout, boosted by ETF inflows and fading confidence in fiat strength.
The US dollar has declined by almost 11% in 2025, reaching lows not recorded in decades. The DXY index, which compares the dollar to a group of major currencies, has dropped to 96.6. This is among the steepest yearly falls since 1973. While stock markets have climbed—with the S&P 500, Dow Jones, and Nasdaq Composite each rising roughly 5% since January—the dollar has continued to weaken.
Investor concerns are rising due to President Trump’s unpredictable economic actions. Sudden shifts in tariff and trade policies have triggered a widespread sell-off of the U.S. dollar. The recent 90-day tariff pause, along with earlier trade disputes, has added to market unease and weakened trust in the dollar’s role as a safe place to hold value.
Further weighing on the currency is the controversial Senate tax bill, called the “Big Beautiful Bill” by Trump, which is drawing criticism for favoring high-income earners. Economists say the plan would lower incomes for the bottom 20% by around $560 to $700 each year, while the top 20% could gain between $5,700 and $6,055. Bloomberg’s estimates suggest the measure may add further pressure on the dollar in the coming months.
Dollar Weakness Shifts Spotlight to Bitcoin as Hedge Asset
Slowing dollar strength diverted investor attention to alternative investments. Bitcoin is now a front-runner, and buying demand has grown significantly. Spot Bitcoin ETFs from the United States have drawn more than $4.63 billion of net inflows alone in the past three weeks. Long-term holders continue to buy, despite occasional profit-taking.
Institutional participation has surged significantly. The asset is drawing support from both macroeconomic uncertainty and a possible promise of a hedge against fading fiat strength. Analysts at DeVere Group highlight the appeal of Bitcoin amid the falling dollar. The digital asset, currently trading around $107,795, is now reaching a critical technical level.
According to market chart analysis by Stockmoney Lizards, Bitcoin is set to break out of a multi-year trading range. Should the asset break through the resistance area around $110,000 – $112,000, the next target is $140,000. The analyst puts a broader year-end target at $200,000.
This formation is not an ascending wedge.
Bitcoin is about to break out of a multi-year channel.
The next leg will be explosive.
Intermediate target: 140k.
Year-end target: 200k. pic.twitter.com/NkftUJUGeh— Stockmoney Lizards (@StockmoneyL) June 30, 2025
Traders Bet on Fed Cuts — Bitcoin Demand Builds on Shifts
Comments from financial leaders add further insight. Chris Iggo, chair of the Axa IM Investment Institute, said,
Any sell-off in risky assets has been quickly reversed. Even measures of implied volatility have moved lower. Traders are betting more heavily on multiple US interest rate cuts.
These expectations have intensified as Trump criticized Federal Reserve Chair Jerome Powell for resisting cuts. Speculation is building around Powell’s possible replacement, one more open to reducing borrowing costs.
The capital is consistently flowing out of traditional currencies. Investors are hedging the risks of fiscal policy and inflation and are looking elsewhere for value. Bitcoin has captured that demand through both technical signals and increasing institutional acceptance.
