In recent months, the US dollar has faced a notable downturn, with the DXY trading at 99.72. This level hasn’t been seen since July 2023, reflecting the ongoing challenges the dollar faces in the global market. A weakening dollar often raises expectations that it might be a positive sign for stocks. After all, when the dollar falls, it can make US exports cheaper and encourage foreign investment. However, this time, the context is quite different.

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The primary catalyst for this shift is the growing trade tensions between the US and China. The imposition of tariffs has made the US a riskier proposition for foreign investors. As the tariffs take their toll on global supply chains, many countries are starting to reassess their relationship with the US, leading to a more cautious global market outlook. The current economic turbulence is far more complex than simply viewing the weaker dollar as a positive for equities.

The bond market is selling off right in the middle of a stock market meltdown. The U.S. is currently being viewed as a risk to the rest of the world, and it’s momentarily breaking the usual mechanics of the market.

Stocks are falling because tariffs are expected to impact the real economy. Under normal circumstances, when stocks drop, we’d typically see a flight to safety—investors rushing into U.S. Treasuries, viewing them as a safe haven. That demand would usually drive bond prices up and yields down.

But this time, that flight to safety isn’t happening. Instead, yields are rising, signaling a potential shift in how the market is interpreting risk.

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With the dollar weakening, stock prices falling, and bonds losing their usual safe haven appeal, the question on everyone’s mind is: What’s keeping Bitcoin afloat? Could we be witnessing the beginning of a broader financial shift where traditional assets, like the US dollar and government bonds, lose their status as safe havens in favor of alternatives like Bitcoin? The resilience of Bitcoin amidst this turmoil suggests that a significant shift in the financial landscape may be underway.