Amid the structural changes in the US economy, analysis suggests that dollar weakness is not just a temporary phenomenon but a critical turning point that could reshape the asset market. Independent investment strategist Lyn Alden emphasized in a recent newsletter that "weak dollar is now an unavoidable choice" and that gold and Bitcoin (BTC) could become key beneficiary assets in the global monetary order restructuring.
The US Dollar Index (DXY) has fallen 11% since early 2025, returning to April 2022 levels. This may not be just market noise but a harbinger of long-term change. Alden pointed out the US economy's over-indebted structure and international dollar liquidity issues, viewing an "orderly retreat" of the dollar-centric system as inevitable. In fact, dollar-denominated debt in and outside the US amounts to $120 trillion, while the corresponding base currency is only $5.8 trillion. She compared this situation to a "musical chairs game with 20 people and one chair", warning that the system could be shaken when the music stops.
The US, the world's largest deficit country, supplies dollars to the global market. However, maintaining an import-excess structure requires dollar strength, which has led to weakened production base and social polarization. While this structural pain created the political foundation for Donald Trump's protectionist promises, Alden analyzed that tariffs cannot reverse this system. Instead, a gradual dollar weakness could resolve US trade imbalances and promote global financial system stability.
In this context, Bitcoin is strengthening its position beyond a speculative asset to an alternative currency. Historical BTC price trends clearly show a tendency to shift during dollar weakness periods. In April 2018 and March 2022, BTC declined during DXY rebounds, while in November 2020, a BTC rally began with DXY's fall. In the 2025 cycle, the two indicators mostly synchronized, but a clear directional difference emerged after DXY dropped below 100 in early April.
If additional BTC price increase signals appear in the current DXY weakness, it could mean Bitcoin has entered a full-scale demand expansion phase aligned with the dollar system transition, beyond a short-term technical movement. Additionally, recent trends of some countries and sovereign wealth funds expanding BTC holdings are reinforcing its position as an alternative asset in de-dollarization.
Alden diagnosed that "both the US and global financial systems have entered a long-term transition period" and emphasized that Bitcoin's role as a neutral asset with fixed supply, alongside gold, will become more prominent in future financial environments.
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