Bitcoin (BTC): Soon to be emancipated from the dollar index?

According to analysts, the ongoing sell-off in the US dollar has always pulled bitcoin down. But bitcoin’s correlation with DYX won’t last forever, argues Acheson, former head of research at CoinDesk and Genesis.

Bitcoin and DYX, a highly complex relationship

For Robert Kiyosaki, we can expect a “giant crash” of the US dollar. A situation which, according to the author of Père Riche Père Pauvre, is favorable to a Bull Run Bitcion.

But the author of the “Crypto is Macro Now” newsletter, Acheson, sees things differently. CoinDesk shared his analysis of bitcoin’s correlation with the dollar index recently.

First, it’s worth noting that the negative correlation between BTC and DYX had eroded a few weeks ago. During this period, bitcoin was struggling to consolidate due to a continued strong sell-off in the greenback.

Moreover, the dollar index fell by 2.26% last week. It even fell below 100.00, its lowest level since April 2022. Strangely enough, bitcoin had stabilized between $30,000 and $32,000.

Does this confirm Robert Kiyosaki’s thesis?

According to Acheson:

“The negative relationship between DYX and BTC is likely to recover, as fluctuations in the dollar index influence global liquidity conditions, which in turn affect valuations of risky assets, including cryptocurrencies.”

Moreover, it seems hard to foresee the end of this correlation between BTC and DXY any time soon. Its place on the global economic chessboard seems solid despite recent de-dollarization efforts.

“However, the BTC-DXY relationship will be difficult to shake for a long time to come. It’s not just because the US dollar is the denominator of the most quoted pair for the crypto-asset (and when the denominator loses value, the ratio rises, and corollary all things similar) – it’s also because a weaker dollar boosts global liquidity by giving US dollar debt holders around the world more room to breathe,” says Acheson in yesterday’s newsletter.

An indestructible dollar?

Whether India trades with Saudi Arabia using its own currency, the dollar remains a global reserve currency. It has always maintained its hegemony in international trade, debt and bank borrowing.

So, when the dollar rises in value, borrowers are confronted with high costs, and as a result, ensure minimal exposure to risky assets. When the dollar rises sharply, the opposite effect occurs.

“The dollar’s decline looks solid,” continues Acheson, against a backdrop of disinflation in the United States. Will this delay the mass adoption of bitcoin?