Bitcoin and Ethereum prices rose after reports of the collapse of the US dollar spread across the market. Recent data shows the U.S. dollar has fallen to a four-year low, raising concerns about the strength of the world’s main reserve currency. As the dollar is weakeningMarket participants are starting to look to alternative assets such as precious metals and digital currencies, including BTC, which is increasingly used. considered a potential hedge against rising inflation and currency depreciation.
The US dollar falls to levels not seen in 4 years
New reports from Bloomberg highlight the relentless decline of the US Dollar Index (DXY) over the past few weeks, with the price falling further after President Donald Trump’s comments on the currency’s performance. Sources reveal that Trump said the dollar was “doing well,” despite its current slowdown.
Related reading
Traders interpreted the president’s seemingly indifferent reaction to the dollar’s decline as a signal that the decline could continue, triggering further selling pressure. Data from the Finviz stock research web platform watch that, at the time of writing, the US dollar index collapsed to 95.92 from a previous level close to 100. This brands its lowest level in almost four years, more precisely since 2022.
Additionally, Bloomberg reported that its Dollar Spot index also posted its smallest four-day decline since Trump announced new tariffs in April 2025. Traders in the $9.5 trillion-a-day foreign exchange markets are also increasingly betting that the dollar could continue to fall as American political risks weigh on the main global reserve currency.
Amid the decline in the US Dollar Index, cryptocurrencies like Bitcoin and Ethereum are posting gains. BTC price increased above $89,000, while Ethereum climbed more than 3% to over $3,000 in the last 24 hours. This simultaneous rally in cryptocurrencies alongside the weakening US dollar suggests investors may be move capital into risky assets.
Market analyst ‘Master of Crypto’ recently describe several reasons behind the continued decline in the weakening of the US dollar in an article on budget deficitsThe FED’s challenge of balancing inflation control with labor market stability, bond supply stability and foreign exchange hedging activities keep the US dollar near recent lows. According to him, in this type of market environment, holding idle cash becomes a significant risk for investors.
Related reading
Possible implications for the price of Bitcoin and Ethereum
Historically, periods of US dollar weakness have often coincided with Bitcoin ralliesand other cryptocurrencies. When the dollar falls, investors sometimes look for alternative assets to preserve value. This may increase demand for Bitcoin and Ethereum, which are considered by many to be alternative stores of value and risky assets.
Although this correlation is not a clear indication of a potential cryptocurrency rally, analysts like “Milk Road Macro” suggest that the falling dollar could help support a broader recovery in the crypto market. He said that as the dollar weakens, capital will flow into precious metals like gold and silver. Shortly after, this same capital was should turn to BTCpotentially fueling a price rebound.
Featured image created with Dall.E, chart from Tradingview.com
