Dollar Slump Favors Gold Over Bitcoin
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Analysts say a weak dollar only helps Bitcoin during easy liquidity or inflation, not during risk-off capital preservation.
Bitcoin (BTC) fell to $86,000 on Sunday as global markets turned defensive, even while the U.S. dollar weakened on fears of currency intervention and bond market stress in Japan. The move has challenged the common view that a falling dollar automatically lifts Bitcoin, with capital instead flowing into gold and silver.
The split matters because it shows where investors are seeking protection during the current bout of uncertainty and why BTC is trading more like a risk asset than a hedge as confidence in fiat currencies wavers.
Weak Dollar, Risk-Off Mood Keeps Pressure on BTC
Market observers note that the dollar’s recent decline has not propelled Bitcoin higher. Instead, capital has flowed decisively into traditional safe havens.
In a January 26 analysis, CryptoQuant contributor GugaOnChain argued that dollar weakness only supports Bitcoin in specific cases, such as high inflation or easy liquidity. However, investors tend to favor assets with long-established roles as stores of value when fear and capital preservation drive currency moves.
This perspective may help explain the present split. The dollar’s softness appears linked to rumors of yen intervention and broader geopolitical stress, including renewed U.S. tariff threats against Europe.
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