Analysts say the US dollar has not shown the strength of normal safe havens during the recent Iran-Israel conflict, but Bitcoin has risen in another attempt to reach $111,970 in history.
“Today, the dollar index is dazzling with the low new cycle,” macroeconomicist Lynn Alden said in a post Wednesday. “We’ve had a barely safe bid over the past few weeks,” Alden added.
“Fiat is declining,” analysts say
Reflecting similar sentiments, Real Vision Crypto analyst Jamie Coutts said “Fiat is in decline.” According to TradingView data, the US Dollar Index (DXY), which measures the strength of USD against major global currencies, is trading at the lowest point since February 2022.
It is approaching the same level that it reached June 13th, when tensions first escalated after Israel launched airstrikes in Iran.
In these circumstances, market participants usually expect a transition from high-risk assets such as cryptocurrencies to safer options such as US dollars and government bonds. In October 2024, major missile strikes by Iran across Israel led to a 2.67% increase in DXY per month.
Traders highlight Bitcoin’s recent strengths
Although the US dollar did not surge during the recent conflict, Bitcoin (BTC) experienced volatility.
On Sunday, Bitcoin briefly fell below $100,000 for the first time since early May. But President Donald Trump’s fragile ceasefire came into effect Monday, and it bounced after being traded for $107,930 at publication, according to CoinmarketCap data.
Crypto analyst Matthew Hyland said “the bulls are in control,” others pointed to Bitcoin’s strong resilience despite recent risk-off conditions.
Crypto is today’s emerging market trade
“Bitcoin has smashed two caves for two weeks over the past month,” Crypto analyst Rekt Capital said Wednesday.
Coutts in Real Vision caused comparisons to the current macro environment in the early 2000s, with the dollar falling resulting in capital turnover into emerging markets and goods.
“If you remember 2002-2008, the last major dollar depreciation ignited a fire under EM stocks and commodities,” Coutts says.
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“EM has three times surpassed DM as capital has chased high growth, younger economies. It is creating BRICS,” he said, adding that the new emerging markets are crypto.
“The code is today’s em. Capital moves to places where energy is,” he said.
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This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
