Yeliz Akmaca 
Financial markets have long accepted a basic rule: when the dollar weakens, Bitcoin rises. Yet recently, this pattern did not hold. The U.S. dollar’s decline pushed gold and other precious metals upward, but Bitcoin did not follow suit.
According to JPMorgan Private Bank strategists, this divergence is no coincidence. Markets are not reading the current dollar weakness as a permanent macro shift and continue to price Bitcoin as a liquidity-sensitive risk asset rather than a safe haven.
In recent weeks, Bitcoin’s lack of a parallel rise alongside the dollar’s retreat signals a redefinition of the dollar–Bitcoin relationship. JPMorgan suggests the key factor lies in why the dollar weakened in the first place.
Dollar Weakness Is Flow-Driven, Not Macro
JPMorgan strategists emphasize that the recent wave of dollar selling is not rooted in a major change in growth outlook or monetary policy expectations. Instead, the movement is largely driven by short-term capital flows and market sentiment.
Yuxuan Tang, Head of Asia Macro Strategy at JPMorgan Private Bank, told CoinDesk that interest rate differentials have widened in favor of the U.S. dollar since the beginning of the year. This indicates that the dollar’s fundamentals remain intact and the recent decline reflects a temporary sell-off.
The bank notes a similar process occurred last April, with the dollar regaining stability as the U.S. economy picked up pace. This helps explain why markets are not treating the current dollar decline as a lasting regime shift.
Why Bitcoin Didn’t Mirror Gold
Today’s market mirrors last year’s April scenario in several ways. Historically, Bitcoin has gained value when the dollar weakened. This time, the pattern reversed.
The U.S. Dollar Index (DXY) fell about 10% over the past year, while Bitcoin lost roughly 13%. This divergence points to a perceptual shift, according to JPMorgan.
Investors continue to view Bitcoin not as a reliable dollar hedge but as a risk asset sensitive to global liquidity conditions. The prominence of gold and emerging market assets during dollar weakness reinforces this perception.
Bitcoin’s confinement to a narrow price range shows that crypto investors are not interpreting the current dollar decline as a strong macro signal. Without a clear shift in monetary policy, a weaker dollar alone is insufficient to draw new capital into crypto markets.
JPMorgan Framework: Bitcoin Lags in Dollar Diversification
The bank notes that, under current conditions, assets that directly benefit from dollar diversification are more attractive than Bitcoin. In periods of dollar weakness, gold and other precious metals remain the first choice.
Recently, this has proven true: gold maintained its upward trajectory while Bitcoin remained range-bound. JPMorgan suggests Bitcoin’s performance may remain limited until growth expectations or currency dynamics once again become the primary market drivers.
As long as flows and sentiment dominate, the largest cryptocurrency may continue to lag behind traditional macro hedges.
Bitcoin (BTC): $87,957
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