This year, Bitcoin has delivered significantly stronger returns compared to the US Dollar Index (DXY), which tracks the dollar against a basket of major global currencies. Since mid-January, the DXY has declined by approximately 12%, effectively erasing nearly five years of gains. In the same period, Bitcoin has appreciated by almost the same percentage, highlighting a notable divergence in performance.
The composition of the DXY plays a role in its decline. The index is heavily weighted toward European currencies, with the euro accounting for more than half of its valuation. Another 20% is distributed among the British pound, Swedish krona, and Swiss franc. The Japanese yen is the only Asian currency included, representing around 14% of the index. The Chinese yuan is not part of the basket. Still, the dollar has weakened by about 2.5% against the yuan since January.
Comparative Performance: Bitcoin vs. Traditional Assets
Bitcoin’s performance stands in stark contrast to the dollar’s depreciation. Within just six months, the BTC/USD pair climbed nearly 12%, while the DXY fell by a similar margin. When adjusted for the DXY’s volatility, the divergence becomes even more apparent.
Over one-year, three-year, and five-year periods, Bitcoin has outperformed assets like crude oil, gold, the S&P 500, and the Nasdaq 100. Among major assets, only Nvidia has delivered stronger returns than Bitcoin over three and five years—though it was absent from recent comparative charts.
Bitcoin Reaches New Highs Across Multiple Metrics
Analysts are increasingly evaluating Bitcoin not only in US dollars but also against key financial indices and commodities. Ratios such as BTC to S&P 500, BTC to Nasdaq 100, and BTC to crude oil all peaked in late May and remain near those highs. In dollar terms, Bitcoin is still just 2% below its all-time high.
The gold-to-Bitcoin ratio tells a different story. It has fallen 20% since its record high in late 2024, making it the only major pair to decline so sharply from its peak.
Despite these variations, Bitcoin recently reached a major milestone on Coinbase, hitting $110,500. When adjusted for the US Dollar Index (DXY), this price actually set a new inflation-adjusted all-time high of $1139.58—2% above the previous record set in May. This achievement stands, regardless of ongoing debates around the structural relevance of the DXY.
Market Impact and Trader Sentiment
Current price levels are significantly impacting market participants, particularly short-sellers. A breakout above $115,000 could trigger liquidations of more than $6 billion in short positions. At present, with Bitcoin trading just under its all-time high, approximately 99% of holders are in profit, according to public blockchain data tracked since January.
This positive momentum reinforces Bitcoin’s role not only as a high-performing asset but also as a strategic hedge against traditional currency weakness. 👉 Explore real-time market insights
Frequently Asked Questions
What is the US Dollar Index (DXY)?
The US Dollar Index measures the value of the US dollar relative to a basket of foreign currencies, including the euro, yen, and pound sterling. It serves as a key indicator of the dollar’s international strength.
Why is Bitcoin often compared to the DXY?
Bitcoin is increasingly viewed as an alternative store of value. When the dollar weakens, investors may turn to Bitcoin as a hedge, making the BTC-DXY comparison relevant for assessing macro-financial trends.
How does Bitcoin performance compare to stocks and commodities?
Over multiple time horizons, Bitcoin has outperformed major indices like the S&P 500 and commodities such as gold and oil, highlighting its growth potential and resilience.
What does a new DXY-adjusted all-time high mean for Bitcoin?
It indicates that Bitcoin’s purchasing power has reached a record level, even when accounting for dollar depreciation. This reinforces its role as a strong inflation-resistant asset.
Are most Bitcoin holders currently in profit?
Yes, nearly 99% of addresses holding Bitcoin are in profit at current prices, reflecting broad-based positive sentiment and long-term confidence.
What happens if Bitcoin breaks above $115,000?
A move above that level could trigger large-scale short liquidations, potentially accelerating upward momentum and attracting further institutional interest.