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By James Van Straten|Edited by Parikshit Mishra
Jun 12, 2025, 11:08 a.m.
- Market now pricing in 99.8 percent chance of June rate cut to 4.25 to 4.50 percent.
- Softer inflation print at 2.4 percent year-over-year increases expectations for monetary easing.
The dollar index (DXY), a measure of the U.S. dollar’s strength against a basket of major global currencies, dropped below 98 for the first time since early 2022.
This move signals a notable shift in global currency markets and could create a favorable environment for risk assets, especially cryptocurrencies, like bitcoin
.
STORY CONTINUES BELOW
In recent years, a DXY reading above 100 has typically reflected dollar dominance and a risk-off sentiment, often weighing on equities and digital assets. Conversely, a weakening dollar eases financial conditions, boosts global liquidity, and tends to benefit speculative assets.
Several factors are contributing to the current decline. US headline inflation came in at 2.4 percent year-over-year, slightly below the consensus estimate of 2.5 percent, strengthening market expectations for a dovish monetary policy shift.
According to the CME FedWatch Tool, markets are now pricing in a 99.8 percent probability of a rate cut at the June Federal Reserve meeting, with the target range expected to drop to 4.25 to 4.50 percent.
Growing narratives around de-dollarization, combined with policy uncertainty from the Trump administration’s trade and tariff policies, have eroded confidence in the dollar, accelerating its decline.
Read more: U.S. Dollar to Slide Further This Summer, Bank of America Warns
James Van Straten is a Senior Analyst at CoinDesk, specializing in Bitcoin and its interplay with the macroeconomic environment. Previously, James worked as a Research Analyst at Saidler & Co., a Swiss hedge fund, where he developed expertise in on-chain analytics. His work focuses on monitoring flows to analyze Bitcoin’s role within the broader financial system.
In addition to his professional endeavors, James serves as an advisor to Coinsilium, a UK publicly traded company, where he provides guidance on their Bitcoin treasury strategy. He also holds investments in Bitcoin and Strategy (MSTR).
