The U.S. dollar has made a strong comeback, jumping more than 3% since President-elect Donald Trump’s victory in November. This rise mirrors the path the dollar took after his 2016 election, leading to increased interest in global markets. As a result, the dollar’s rally could continue, potentially influencing Bitcoin’s (BTC-USD) momentum.
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Dollar’s Surge Matches 2016 Trajectory
Just like in 2016, the DXY Index, which tracks the dollar against major global currencies, has spiked. Back then, the dollar peaked in December, setting the stage for Bitcoin’s impressive bull run. However, this time, the dollar’s strength might not fade as quickly, with Trump’s policies and the Federal Reserve’s stance likely keeping the momentum going.
Bitcoin Faces a Strong Dollar Headwind
While Bitcoin soared after Trump’s win, experts warn that its growth might slow. “The Fed is stuck between a rock and a hard place,” said Andre Dragosch, Bitwise’s head of research in Europe, in a note to Coindesk. With high interest rates and the Fed’s cautious approach, Bitcoin may face tougher times ahead. Despite Trump’s support for Bitcoin, the dollar’s rise and global economic policies could put a dent in Bitcoin’s bull run. According to Dragosch, “Macro is a headwind right now.”
At the time of writing, Bitcoin is sitting at $96,730.44.
