Key Takeaways
- Raoul Pal says a weakening US dollar could boost Bitcoin in Q2.
- The US Dollar Index (DXY) has dropped 2.79% since Feb. 5.
- Bitcoin has risen nearly 6% in the same period, trading at $91,860.
Pal pointed to the falling value of the US dollar as a key driver for Bitcoin’s recent 4% surge, adding that easing financial conditions could fuel further gains in Q2 2025.
He wrote on March 5:
With the dollar, rates, and oil headed lower (all specific aims of [US Treasury Secretary Scott] Bessent), financial conditions are now easing fast and lead risk assets by a couple of months.
US Dollar index movement
Since Feb. 5, the US Dollar Index (DXY), which measures the dollar against a basket of major currencies, has dropped 2.79% to 104.258.
Bitcoin, meanwhile, has gained nearly 6% in the same period, trading at $91,860.
Influence of the Dollar on Bitcoin
Pal emphasized that the dollar’s movement is the most critical factor influencing Bitcoin.
A weaker dollar often leads investors to seek alternative stores of value, with Bitcoin historically benefiting from this trend.
Crypto analysts have echoed Pal’s sentiment, with Bitcoinsensus noting that a bearish DXY…
… means one thing, bullish Bitcoin long term if the drop continues.
Historical context
The relationship between a weaker dollar and Bitcoin’s rise was evident in 2020 when stimulus and rate cuts fueled Bitcoin’s rally from $5,000 to over $60,000 within a year.
Analysts had previously warned that a strengthening dollar, such as during Donald Trump’s election, could negatively impact Bitcoin.
