Bitcoin Hits New All-Time High Against US Dollar Index Amid 12% Decline

Bitcoin has recently achieved a significant milestone, setting a new all-time high against the US dollar index. This development comes as the US dollar has faced considerable depreciation this year, with the DXY index, which measures the greenback against a basket of currencies, down by 12% since mid-January. This decline has effectively erased most of the gains the dollar made over the past five years.

The DXY index is heavily weighted towards European currencies, with over half of its weight assigned to the euro and significant portions to the British pound, Swedish krona, and Swiss franc. Notably, the Japanese yen is the only Asian currency featured, with about 14% weight, while the renminbi is excluded altogether. Against the yuan, the US dollar has only depreciated by about 2.5% since mid-January.

Bitcoin's performance against the US dollar index has been particularly impressive. Over the past six months, Bitcoin has surged by almost 12%, while the DXY index has declined by a similar percentage. This performance highlights Bitcoin's resilience and its ability to outperform major assets and benchmarks over various time horizons, including five years, three years, and one year.

When compared to other major assets, Bitcoin priced in US dollars has outperformed crude oil, gold, the S&P 500, and the Nasdaq 100. This trend is evident when examining Bitcoin's ratio with these assets, which topped out in late May and remains close to its peak. Currently, Bitcoin is only 2% short of setting a new price record against the US dollar in raw dollar terms, not adjusted for DXY.

However, the gold/bitcoin ratio is almost 20% below its all-time high from a week before Christmas 2024, indicating that while Bitcoin has performed well, it has not surpassed all previous records across the board. Despite this, Bitcoin's achievement of hitting $110,500 earlier this morning on Coinbase marked an all-time high against the DXY index, reaching 1139.58, which is around 2% higher than the previous peak in late May. This minor victory is notable given the flaws in the DXY index, but it nonetheless represents a significant milestone for Bitcoin.