Here is How a Weaker Dollar Could Propel Bitcoin’s Growth

According to a report by 10x Research, recent changes in global macroeconomic conditions suggest that the decline in global growth may be coming to an end.

The report states that the depreciation of the U.S. dollar and the actions of major central banks, such as Japan’s and China’s, signal a potential reversal of the economic downturn seen in 2022 and 2023.

Since the introduction of spot Bitcoin ETFs, stablecoin activity has surged, with $39 billion in stablecoins issued compared to $18.5 billion in ETF purchases.

While not all of these stablecoins invest directly in Bitcoin, this inflow has reportedly helped stabilize the broader crypto market during potential corrections.

It also highlights that larger macro liquidity forces may soon eclipse these smaller liquidity dynamics. The strength of the US dollar has a significant impact on global liquidity; its rally begins in February 2022, coinciding with geopolitical tensions. The appreciation of the dollar has impacted global markets, increasing the price of US commodities and pushing the ISM manufacturing index from expansion to contraction.

Since July 2024, the dollar has fallen 6%, approaching the 100 level on the DXY Dollar Index, its lowest level since April 2022. This decline, about 15% from its peak after the Ukraine invasion, could positively impact the US ISM index.

It also highlights the coordinated actions of the Bank of Japan and the People’s Bank of China, with both central banks timing their moves based on signals from the Federal Reserve.

The report states that a more stable ISM reading in the near future could lead to a Bitcoin rally, indicating a favorable macro environment that could pave the way for Bitcoin to reach new all-time highs.

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