Coin Market

Bitcoin price fails to go parabolic as the US Dollar Index (DXY) falls — Why?

Published

2 weeks ago

March 17, 2025

Bitcoin (BTC) has fallen 12% since March 2, when it nearly reached $94,000. Interestingly, during the same period, the US dollar weakened against a basket of foreign currencies, which is usually seen as a positive sign for scarce assets like BTC.

Investors are now puzzled as to why Bitcoin hasn’t reacted positively to the declining DXY and what could be the next factor to trigger a decoupling from this trend.

US Dollar Index (DXY, left) vs. Bitcoin/USD (right). Source: TradingView / Cointelegraph

Up to mid-2024, the US Dollar Index (DXY) had an inverse relationship with Bitcoin’s price, meaning the cryptocurrency often rose when the dollar weakened. During that time, Bitcoin was widely viewed as a hedge against inflation, thanks to its lack of correlation with the stock market and its fixed monetary policy, similar to digital gold.

However, correlation does not imply causation, and the past eight months have shown that the rationale for investing in Bitcoin evolves over time. For instance, some analysts claim that Bitcoin’s price aligns with global monetary supply as central banks adjust economic policies, while others emphasize its role as uncensorable money, enabling free transactions for governments and individuals alike.

Bitcoin gains from DXY weakness can take months or years to materialize

Julien Bittel, the head of macro research at Global Macro Investor, pointed out that the recent drop in the US Dollar Index—from 107.6 on Feb. 28 to 103.60 on March 7—has occurred only three times in the past twelve years.

Source: BittelJulien

Bittel’s post on X highlights that Bitcoin’s price surged after the last significant drop in the DXY Index in November 2022, as well as following the March 2020 event, when the US dollar fell from 99.5 to 95 during the early weeks of the COVID-19 crisis. His analysis emphasizes that “financial conditions lead risk assets by a couple of months. Right now, financial conditions are easing – and fast.”

While Bittel’s comments are highly bullish for Bitcoin’s price, the positive effects of past US dollar weakness took more than six months to materialize and, in some cases, even a couple of years, such as during the 2016-17 cycle. The current underperformance of Bitcoin may be due to “short-term macro fears,” according to user @21_XBT.

Source: 21_XBT

The analyst briefly cites several reasons for Bitcoin’s recent price weakness, including “Tariffs, Doge, Yen carry trade, yields, DXY, growth scares,” but concludes that none of these factors alter Bitcoin’s long-term fundamentals, suggesting its price will eventually benefit.

For example, cuts by the US Department of Government Efficiency (DOGE) are highly positive for the economy in the medium term, as they reduce overall debt and interest payments, freeing up resources for productivity-boosting measures. Similarly, tariffs could prove beneficial if the Trump administration achieves a more favorable trade balance by increasing US exports, as this could pave the way for sustainable economic growth.

The measures taken by the US government have trimmed excessive but unsustainable growth, causing short-term pain while lowering yields on US Treasury notes, making it cheaper to refinance debt. However, there is no indication that the US dollar’s role as the world’s reserve currency is weakening, nor is there reduced demand for US Treasurys. As a result, the recent decline in the DXY Index does not directly correlate with Bitcoin’s appeal.

Over time, as user @21_XBT noted, macroeconomic fears will fade as central banks adopt more expansionary monetary policies to stimulate economies. This will likely lead Bitcoin to decouple from the DXY Index, setting the stage for a new all-time high in 2025.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Coin Market

DoubleZero protocol announces validator token sale

Published

45 minutes ago

April 2, 2025

The DoubleZero Protocol, a blockchain infrastructure network aiming to multiply speeds and efficiency for distributed networks, announced a validator token sale to sell token-purchase agreements for its native token to prospective validators.

Applications for the sale will be accepted April 2-10 through the CoinList platform, marking its first public token sale in the United States since 2019. The round is only available to accredited investors.

According to the protocol, only validators currently serving the high-throughput Solana, Celestia, Sui, Aptos, and Avalanche networks are eligible to apply.

Interested parties are invited to submit bids declaring a per-unit token price and maximum budgets, which will be aggregated to determine the final sale price offered to the participating validators.

A diagram of the DoubleZero validator funding round process. Source: CoinList

In a statement to Cointelegraph, Austin Federa, co-founder of the Double Zero protocol and former Strategy lead at the Solana Foundation, said:

“The DoubleZero CoinList sale is a first-of-its-kind opportunity for the validators who are already securing the most performant and distributed blockchains. It opens access to infrastructure that will power the next generation of distributed systems.”

“This industry has seen huge investment and innovation at the top of the stack — it is time to revolutionize the physical infrastructure layer powering high-performance distributed systems,” Federa said in the statement.

The token-purchase agreement comes amid a recent uptick in capital fundraising from crypto firms and crypto venture capitalists — suggesting that the market has room to grow in 2025.

DoubleZero protocol targets mainnet launch in the second half of 2025

The DoubleZero Protocol is aiming to launch its mainnet during the second half of 2025 following a successful $28 million fundraising round completed in March.

Crypto venture capital firms Multicoin Capital and Dragonfly Capital led the most recent fundraising round.

First page of the DoubleZero Protocol white paper. Source: DoubleZero

DoubleZero aims to increase the speed and communication of blockchain networks by using a dedicated network of fiber optics to provide the physical infrastructure for high-speed, low-latency blockchain connectivity.

The focus on a dedicated fiber optic network for higher speeds is similar to the shift from dial-up internet that used 56K modems operating through 20th-century telecommunication infrastructure to broadband systems in the early 2000s.

Magazine: Is measuring blockchain transactions per second (TPS) stupid in 2024? Big Questions

Coin Market

West Virginia's BTC reserve bill is 'freedom' from a CBDC — State Senator

Published

46 minutes ago

April 2, 2025

West Virginia’s Bitcoin (BTC) strategic reserve bill would give the state more sovereignty from the federal government and freedom from a potential central bank digital currency (CBDC), State Senator Chris Rose told Cointelegraph in an exclusive interview.

“You hear these rumors that there are people at the federal government that will want to have a central bank digital currency,” Rose said. “And people don’t want that. People want decentralized currency. They want freedom.”

The bill, introduced in February, seeks to allow the state treasury to invest up to 10% of public funds in precious metals like gold and silver, stablecoins, or any digital asset that has had a $750 million market capitalization or higher over the last 12 months. Currently, the only digital asset with such a market cap is Bitcoin.

West Virginia State Senator Chris Rose. Source: Cointelegraph

Rose, the bill’s sponsor, said that the reason they decided on the market cap requirement was to allow the state to have exposure to cryptocurrency, but not to get trapped “in any things like memecoins.”

Adopting Bitcoin on the state level would “give us a little more state sovereignty,” Rose added. “And I think that’s one reason why you see a lot of people who normally buy [Bitcoin] for themselves want to see their state government do the same.”

He added that a 10% allocation of state funds would be a “good way to introduce [Bitcoin] to the state” while avoiding any fear from people who don’t understand digital assets. “It’s a good way to cap that where they feel comfortable, but also give us at least a decent exposure as well.”

Bitcoin: “a very powerful” investment and freedom tool

Rose said that one of the roadblocks to getting the bill passed is fear, in particular among those who don’t understand cryptocurrency. “Just like any other state, we have people who understand it. We also have people that don’t understand it, and people are always afraid of what they don’t know.”

He added that “once they understand it, they realize it’s a very powerful investment tool and freedom tool for every one of us to adopt.”

Excerpt of West Virginia Bitcoin reserve bill. Source: West Virginia Legislature

West Virginia Governor Patrick Morrisey, who has envisioned a future state economy powered by crypto and other tech, won’t be a roadblock, Rose said. And the state treasurer, whom Rose consulted before introducing the bill, won’t either.

However, according to WVNews, a West Virginia publication, some lawmakers and financial experts remain skeptical. Investing state funds into Bitcoin may be risky due to the asset’s volatility and price swings, which can cause financial instability and make Bitcoin a controversial choice for state investments.

Although Bitcoin strategic reserve bills have been popping up in state legislatures around the United States, some bills have failed to pass or have scrapped key provisions, including some of those in traditionally conservative states.

Currently, 47 strategic Bitcoin reserve bills have been introduced in 26 states according to Bitcoin Laws. While, in most of the states, the bills have only been introduced or referred to committees, some have made headway in three: Arizona, Oklahoma, and Texas.

Rose clarified that the 10% of state funds allocated to precious metals, stablecoins, or Bitcoin would be sourced from two key areas.

“It would be the assets under the pensions fund and under the severance tax fund,” Rose said. “They would be able to divest some of those ETF funds into these assets. We wanted to keep it separate from the petty cash fund, which is day-to-day, just paying the bills of the state. We wanted to keep it to our longer-term assets,” he added.

Magazine: X Hall of Flame, Benjamin Cowen: Bitcoin dominance will fall in 2025

Coin Market

Bitcoin rally to $88.5K obliterates bears as spot volumes soar — Will a tariff war stop the party?

Published

46 minutes ago

April 2, 2025

Bitcoin price caught an unexpected bid by rallying to a session high at $88,500, but will the price gains be capped at a multimonth overhead resistance that is aligned with the 50-day moving average?

Key points:

Bitcoin extended its April. 1 gains as news that the Trump administration had not finalized its “Liberation Day” tariffs emerged.

Israel, Mexico and India have already rolled back their tariffs on US imports or suggested that they will not do “tit for tat” tariffs in response to the expected April 2 US tariffs.

Bitcoin (BTC) trades slightly below a 3-month descending trendline resistance where the price has consistentlybeen rejected during past rallies.

Total market liquidations over the past 12-hour trading period have reached $145 million, with $69.4 million of the figure being Bitcoin shorts.

Data from Kingfisher, CoinGlass and Velo show short liquidations playing a role in today’s push above $88,500.

Crypto market liquidations in the past 12-hours. Source. CoinGlass

For the past few months, Bitcoin price has struggled to hold the gains accrued from rallies driven by leverage. Looking beyond futures markets, there are some positives that suggest that the market structure is slowly transitioning from bearish to bullish.

As shown in the chart below, recent rallies were accompanied by a strong bid in the spot market and the return of the Coinbase Pro premium, leading some analysts to speculate buying from Strategy and other companies focused on building Bitcoin reserves.

Coinbase premium index. Source: CryptoQuant

Over the last two weeks, GameStop, MARA, Metaplanet and Strategy all announced plans to buy more Bitcoin, with GameStop being on the verge of purchasing and Strategy actively adding to its BTC position.

GameStop secures $1.5B for possible BTC purchase. Source: Arkham

In the short-term, sustained spot buy volume at Binance and Coinbase Pro, and the crypto and equities markets’ response to President Donald Trump’s “Liberation Day” tariffs are likely to be the most impactful factors that will influence the current bullish momentum seen in Bitcoin price.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.