DXY weakness triggers capital shift, the encryption market may迎来新一轮增长

On Wednesday, the US Dollar Index (DXY) plummeted to 97.2, marking the lowest level since 2022, which also triggered analysts' expectations of a significant shift in capital potentially flowing towards BTC and encryption.

Against the backdrop of a persistently weak DXY, investors are actively responding to macroeconomic uncertainties and preparing for the generational shift of digital assets.

According to data analysis from Barchart, the US Dollar Index (DXY) is expected to depreciate by more than 10% in 2025, marking the worst performance in the first half of the year in nearly 40 years. This rapid depreciation phenomenon has prompted comparisons with past market cycles, during which the decline of the DXY had triggered strong rebounds in other markets.

Real Vision's chief encryption analyst Jamie Coutts pointed out that the depreciation of the dollar from 2002 to 2008 drove emerging market (EM) stocks and commodities to surge, outperforming developed markets (DM) by three times.

And now, the cryptocurrency market is rising like the emerging markets of twenty years ago. Therefore, the global fiat currencies are weakening, making digital assets seen as the next frontier for growth.

The viewpoint of Coutts has also been endorsed by analysts Mister Crypto and Chainbull, and the decline of DXY along with the stabilization of Bitcoin's dominance suggests that the altcoin season may be approaching.

At the same time, as Bitcoin's dominance recently reached an annual high, it has also raised questions about investors' enthusiasm for altcoins. However, as traders' expectations for a weak dollar grow, the trend of funds flowing into small-cap tokens may quickly disrupt the existing pattern.

The market generally believes that the overall trend of the cryptocurrency market is usually inversely related to the strength of the US dollar index (DXY). When the DXY weakens, borrowing costs decrease, liquidity increases, and investors' risk appetite rises, creating favorable conditions for digital assets. If this trend continues, capital may flood into the crypto market on a large scale, recreating the prosperous scene of emerging markets in the early 21st century.

In summary, with the synergy of macro factors, historically similar trends, on-chain and real-time signals, a large-scale rebound of encryption currencies may have already begun.

In summary, whether the altcoin season arrives or Bitcoin regains its strong momentum, the decline of DXY is reshaping investors' preferences for risk assets, and encryption currencies may significantly benefit from this.

#美元贬值 # encryption currency #市场反弹 # capital flow