Flight from Fiat? Bitcoin Jumps While Dollar Nosedives
The cryptocurrency soared above $84K on Friday as the U.S. dollar fell to a three-year low in the face of weakening confidence in USD-denominated assets. Despite President Donald Trump touting the success of his aggressive tariff strategy, what appears to be a loss of confidence in American trade policy, has sent the U.S. dollar (USD) plummeting to a three-year low, but bitcoin (BTC) has soared above $84K.
Overview of Market Metrics
The digital asset has surged by 5.83% over the past 24 hours, trading at $83,812.18 at the time of reporting. BTC climbed from a daily low of $78,936.32 to a high of $84,138.74, shaking off recent weakness that had dragged its weekly performance down by nearly 1%. Despite the price spike, trading volume tumbled by almost 33% to $41.10 billion, a sign that the rally may have caught many off guard.
(BTC price/ Trading View)
Bitcoin’s total market capitalization now stands at $1.66 trillion, marking a sharp 6.05% increase since yesterday. BTC dominance also edged higher, rising by 0.83 percentage points to 63.73%, an indication that bitcoin continues to eclipse most altcoins during the current rally. Notably, futures open interest surged 8.46% over the past day to hit $56.52 billion, suggesting growing interest in leveraged positions, particularly on the bullish side of the trade.
(BTC dominance / Trading View)
Liquidation data from Coinglass underscores just how unexpectedly the price action unfolded. Over the past 24 hours, $13.66 million in bitcoin positions were liquidated, with bears getting wrecked en masse to the tune of $13.47 million. Only a tiny fraction, $188,890, came from long liquidations.
U.S. Dollar Index Slumps to Historic Lows
The U.S. dollar index is a measure of the USD’s value relative to currencies of America’s six largest trading partners: Canada, the European Union, Switzerland, Japan, Britain, and Sweden. At the time of reporting, the index had fallen to 100.10, a level not seen since 2022. Reporting from Morningstar indicates a general loss of confidence in U.S. assets as European investors flee from what has historically been considered a safe-haven currency, that is, until Trump’s tariff tantrum.
(The U.S. Dollar Index shows that the USD is currently at a 3-year low / Investing.com)
The silver lining in all of this has been the appreciation of competing currencies such as the Swiss franc which surged to a decade high against the USD, the euro, which is at a three-year peak, and of course bitcoin, which is back above $80K. If such a relationship continues, we may finally witness a changing of the guard as BTC takes over the role of the world’s global reserve currency from the greenback, which would likely catapult bitcoin to historic highs.
