Bitcoin News Today: Bitcoin's Evolving Identity: From Inflation Hedge to Dollar Barometer

Bitcoin, long touted as a digital inflation hedge, is proving less reliable in that role than many investors assume, according to a new analysis from NYDIG. Instead, the cryptocurrency appears more sensitive to fluctuations in the U.S. dollar, a dynamic that could reshape its appeal as macroeconomic conditions evolve. The findings challenge a core narrative in the crypto space and highlight the asset's growing entanglement with traditional financial markets, according to a Cointelegraph report.

Technical indicators suggest Bitcoin's price remains volatile amid mixed signals about its future direction. The cryptocurrency, which recently traded near $113,000, has formed a "rising wedge" pattern on weekly charts—a bearish formation that could push prices below $60,000 in the near term, according to a crypto.news analysis. Analysts at crypto.news note that Bitcoin's deviation from its 200-week moving average and a bearish divergence in key technical indicators like the Relative Strength Index also point to potential downward pressure. Meanwhile, K33 analysts argue that while Bitcoin has underperformed the Nasdaq-100 in 2025, strong institutional adoption and macroeconomic tailwinds could fuel a rebound, according to an FXStreet article.

The disconnect between Bitcoin and inflation is further underscored by NYDIG's data. Greg Cipolaro, the firm's global head of research, emphasized that correlations between Bitcoin and inflationary measures are "neither consistent nor extremely high," despite the asset's "digital gold" branding, as Cointelegraph reported. Gold, traditionally viewed as an inflation hedge, fares no better, with Cipolaro noting its own inconsistent and sometimes inverse relationship with inflation. Instead, both assets appear more responsive to real interest rates and the U.S. dollar's strength. When the dollar weakens, Bitcoin and gold tend to rise, though the two remain uncorrelated with each other, according to a Coindesk piece.

This dollar dynamic is gaining prominence as global monetary policy shifts. Jurrien Timmer of Fidelity highlighted that the combined market value of gold and Bitcoin now stands at about 133% of the U.S. M2 money supply, nearing historic peaks seen in 1980, in a Yahoo Finance note. While this suggests robust demand as a hedge against dollar devaluation, Timmer warns that the "easy returns" from inflation fears may already be priced in, signaling a potential plateau for further gains.

Bitcoin's evolving role in the financial ecosystem is also reshaping its risk profile. Unlike gold, which has long been a store of value, Bitcoin's price appears increasingly tied to liquidity conditions and institutional activity. BlackRock's Bitcoin ETF, now approaching $100 billion in assets under management, and the integration of crypto products into retirement portfolios illustrate this trend, according to FXStreet. Yet, as funding rates for Bitcoin perpetuals turn negative and open interest grows, short-term volatility remains a concern for traders navigating the asset's dual identity as both a speculative play and a macroeconomic barometer.