U.S. Dollar Drops 10.7%, Bitcoin Surges, Gold Hits New High

• U.S. Dollar declines 10.7% in 98 days, signaling economic uncertainty and inflation fears.
• Bitcoin breaks $88K with institutional adoption showing strong market confidence.
• Gold hits a new record high, driven by growing demand for inflation protection.

The U.S. Dollar Index (DXY) has tumbled by 10.7% within 100 days, dropping to 98.341, signaling a major shift in the Forex market. This decline, amounting to 12.255 points or an 11.12% decrease, underscores growing concerns about the dollar’s stability. The prominent reason behind the dollar’s drop is the escalating U.S.-China trade conflicts, highlighting President Trump’s erratic tariff policies. Further, the declines in the dollar value are amplified due to increased inflation and uncertainties about the fiscal policies.

Source: X

An analysis of the DXY chart indicates the cross of the blue 50-period MA falling below the red 200-period moving average, implying a death cross. This indicates that the dollar has been under severe bearish pressure for a while. Further, the inability of the DXY to hold onto the 100 level, a major support region, suggests further bearishness.

Rising Bitcoin and Gold Amid Dollar Weakness

Meanwhile, the crypto market witnessed a surge in Bitcoin’s price, which increased to $88,327.88, showing a 0.75% increase in the last 24 hours. Having a market cap of USD 1.75 trillion, it maintains its dominance in the cryptocurrency realm. The asset has a circulating supply of 19.85 million BTC out of a total supply of 21 million BTC.

Further, the trading volume of Bitcoin significantly increased by 52.52% to reach USD 38.42 billion, indicating an active market and investor attention. Also, the fully diluted valuation (FDV) is USD 1.85 trillion, indicating the potential for continued growth.

Source: CoinMarketCap

Apart from market volatility, Bitcoin’s surge is also connected to the accumulation of the digital asset by institutional investors. Notably, Metaplanet and Strategy are the major corporations that acquire Bitcoin at any given opportunity.

On Monday, StrategyB purchased 6,556 BTC worth $555.8 million, totalling its holdings to 538,200 BTC, while Metaplanet has a total of 4,525 BTC in its vault, worth 58.1B yen. Apart from the duo, Bitcoin is being purchased by several institutions as an alternative asset for inflation and currency devaluation hedge.

Apart from USD and Bitcoin, market observers noticed a price change in gold. The asset attained its all-time high (ATH), trading at nearly $3,430 per ounce. The yellow metal has risen by about 30% since the start of the year, with substantial inflows into gold exchange-traded funds (ETFs) signaling a heightened demand for safe-haven assets. 

Following the spike, Peter Schiff, who strongly inclines his thoughts on the metal, emphasized that gold is the most trusted store of value and the only haven. Further, Robert Kiyosaki, the author of Rich Dad Poor Dad, stated that apart from gold, investments should be made in Bitcoin and silver as they are critical tools that could be used during turbulent economic times.

Related: Is Bitcoin Losing to Gold? BTC at Risk of Falling to $70K

The Impact of Economic Policies

With the dollar dip, global markets faced losses, with commodities and risk assets bearing the main brunt of it. Alternative stores of value, such as Bitcoin and gold, have created havoc with wealth preservation in the face of currency depreciation and inflation. 

Apart from this, the M2 money supply grew by 3.9% year on year to $21.62 trillion in February 2025, signaling continued monetary expansion, putting even more pressure up front. Even with a money supply of such a level, there is a growing concern that inflation would occur shortly, posing a direct and potential threat to the purchasing power of fiat currencies.

With the economic climate in flux, one key question remains: What will happen to the economy after the 90-day pause period? Will the U.S. Dollar stabilize, or will the continued decline of the DXY result in further shifts towards alternative assets? As the market watches closely, the answer to this question could shape the global economic landscape in the coming months.

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