The Dollar’s Decline: A Catalyst for a Crypto Boom!

The global economy operates in cycles where fiat currencies play a key role in the dynamics of the markets. Indeed, the weakening of the US dollar, often seen as an indicator of macroeconomic readjustment, seems this time to open a window of opportunity for cryptos. According to Raoul Pal, analyst and CEO of Real Vision, the fall of the dollar could be the catalyst for a particularly bullish second quarter of 2025 for bitcoin and the entire crypto market. This optimism is based on historical data and well-established macroeconomic trends. But then, is this situation the signal of a sustainable rally or simply a temporary market reaction?

The dollar under pressure: a bullish signal for bitcoin

Since early February, the Dollar Index (DXY), an indicator that measures the value of the greenback against a basket of currencies, has recorded a decline of 2.79%, reaching 104.258 according to TradingView data. A drop that comes as Scott Bessent, secretary of the US Treasury, confirmed in an interview on Fox News on March 4, 2025, his intention to ease monetary conditions by lowering interest rates. For Raoul Pal, this decline of the dollar is a key variable. He states in a post on the social media platform X (formerly Twitter) on March 5, 2025, “that with a dollar, falling rates, and oil prices, financial conditions are easing quickly and driving risk assets upwards.”

The first reactions from the crypto market did not take long. In parallel with the drop in the DXY, bitcoin rose by 6%, reaching $91,860 on March 6, 2025, a trend that reinforces the hypothesis of a direct link between the decline of the dollar and the growing interest in cryptos. This pattern is not unprecedented: in 2020, during the pandemic, massive liquidity injections and near-zero interest rates propelled bitcoin from $5,000 to over $60,000 in a year.

The challenge of global liquidity and the milestone of March 25

Beyond the mere weakness of the dollar, it is the evolution of global liquidity that could play a key role in the coming weeks. According to André Dragosch, an analyst at Bitwise, the increase in global money supply is about to reach a new historical peak, a signal that could amplify the renewed interest in risky assets, including bitcoin. Thus, “if this trend is confirmed, global money supply will soon exceed its previous records,” he declared in a post on the X platform (formerly Twitter) on March 5, 2025.

Another element draws analysts’ attention: the date of March 25, 2025. Identified as a turning point by several experts, this period would coincide with an expected rebound of the markets, linked to the revival of capital flows into cryptos. Colin Talks Crypto, a sector specialist, emphasized on the X platform on March 5, “the recovery of stocks, bitcoin, and cryptos will be spectacular.” A scenario reminiscent of previous expansion phases where the market followed a bullish dynamic after accumulation periods.

However, the outlook remains subject to many factors of uncertainty. A potential brutal correction of bitcoin, a reversal of monetary policy, or an unexpected rebound of the dollar could hinder this momentum. History shows that while the correlation between the dollar and bitcoin is established, it is never linear, leaving room for sometimes unpredictable adjustments.