Bitcoin Surges 11% as U.S. Dollar Loses Value

Bitcoin has been rapidly reaching new heights, maintaining a robust demand. While the rise in Bitcoin’s price hasn’t yet significantly influenced altcoins, historical data indicates potential future scenarios. Macroeconomics experts consider the latest surge far from ordinary, noting that the currency values are increasing while the U.S. dollar lost 11% in value over six months, and cryptocurrencies gained a valuation of $1 trillion within three months.

Volatility was anticipated for the past week, and cautionary notes were made long before. As expected, developments related to tariffs initiated a significant movement; however, it defied the predicted direction. The anticipated rise due to tariff agreements emerged amidst an environment reflective of April’s rates by August 1. The currency values are increasing while the U.S. dollar lost 11% in value over six months, and cryptocurrencies gained a valuation of $1 trillion within three months. Following the U.S. House of Representatives’ approval of President Trump’s ‘Big Beautiful Bill’ on July 3, a bullish sentiment has become apparent in market charts. While gold was increasing, Bitcoin also entered the scene.

The importance of scrutinizing the DXY, or U.S. Dollar Index graph, is highlighted. When analyzed alongside the Bitcoin trend, it reveals two distinct divergences since the year began. These occurred after a 90-day tariff pause in April and with the approval of the ‘Big Beautiful Bill’ on July 1. Entering July, the market received data showing that the U.S. had incurred a deficit of $316 billion, marking the third-largest recorded deficit. A brief relief followed due to Musk’s opposition to the bill. Come July, Trump emerged victoriously.

While BTC seems to be rising in anticipation of a trade agreement, gold follows yet the DXY declines. This situation appears unusual. The U.S.’ fiscal abyss expands and as debt multiplies, institutional capital floods towards Bitcoin. Previously noted, IBIT achieved success in less than 350 days, a feat taking the largest gold ETF 15 years to match. Family offices, hedge funds, and broadly, institutional capital can no longer ignore Bitcoin. Even conservative funds wish to allocate around 1% of AUM to BTC. Moreover, when we mention Bitcoin entering ‘crisis mode,’ it does not imply a downturn for other assets. In contrast, increased government spending’s short-term effects are ‘bullish,’ suggesting risk assets will keep rising.

Ironically, eliminating the U.S. budget deficit might solve many issues—lowering rates, reducing inflation, and strengthening the U.S. dollar. Yet, Bitcoin clearly understands this is unlikely, as the rally accelerated post-spending bill approval. In summary, it’s not tariffs or interest cuts triggering the rise. The surge in cryptocurrencies traces back to the U.S.’ increment of its endless debt by another $5 trillion, coinciding with the approval of Trump’s tax law, spurring a simultaneous crisis hype. As the U.S. debt swiftly increases, people anticipate the dollar’s further devaluation, thus showing interest in Bitcoin.