XRP (XRP-USD) led crypto losses in the final days of 2024, falling 9.23% over the past five days as the strength of the US dollar rattled Bitcoin and other digital assets. The stronger dollar, historically seen moving in the opposite direction to Bitcoin, has made dollar-denominated assets more attractive, dampening demand for cryptocurrencies. According to CoinDeskBitcoin fell as much as 3%, while other major tokens like Ethereum (ETH-USD), Solana (SOL-USD), and Dogecoin (DOGE-USD) followed suit.
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Dollar Strength Affects Bitcoin and Altcoins
The US Dollar Index (DXY) rates the greenback against other major currencies, and its rise is generally bad news for crypto. With a strong dollar, investors are turning to traditional assets like U.S. Treasuries or stocks, which offer better returns in this environment. This change created a drag on the crypto market, blocking hopes of a “Santa Gathering” in December.
Long-term optimism remains despite short-term challenges
Some nevertheless remain optimistic about the future. Maksym Sakharov, co-founder of WeFi, said CoinDesk“Despite the ongoing consolidation, Bitcoin and altcoins have not reached their highest prices.” He believes that with favorable regulation under the leadership of President-elect Donald Trump, Bitcoin could decouple itself from traditional market fluctuations in 2025.