JPMorgan: Bitcoin Still Seen as Liquidity-Sensitive Risk Asset, Did Not Benefit From Dollar Weakness

BlockBeats News, January 29th. The US Dollar Index (DXY) has fallen by 10% over the past year, but Bitcoin has not followed its usual pattern of rising with a weakening dollar, instead experiencing a 13% decline during the same period. Strategists at JPMorgan Private Bank have stated that the current dollar softness is primarily driven by short-term fund flows and market sentiment rather than changes in growth or monetary policy expectations. The dollar interest rate differential has actually been supportive of the dollar since the beginning of the year, causing Bitcoin to not behave as the typical dollar hedge tool.

JPMorgan analysts believe that since the market does not view the current dollar decline as a lasting macro shift, Bitcoin is still seen as a liquidity-sensitive risk asset rather than a reliable store of value. In contrast, gold and emerging market assets have become more direct beneficiaries of dollar diversification.