Earlier this month, the price of Bitcoin crossed $120,000 for the first time ever. Are the new all-time highs the result of investor confidence about Bitcoin staying above the six-figure line? Are they excitement about pending crypto legislation in Congress?
Maybe. But there’s another, arguably more important factor in Bitcoin’s recent run-up: The sharp drop in the value of the U.S. dollar in 2025.
Wondering what I’m talking about? Let’s look at the numbers…
Below is a table of the top 7 currencies in order of global market cap, with their year-to-date currency index returns (the price of each currency as measured against a basket of global currencies) and the year-to-date return of Bitcoin in each currency.
Source: Yahoo Finance (for currency index returns) and Google Finance (for Bitcoin returns). Data is current as of 6:30 pm Eastern time on Jul. 15, 2025, and is intended for informational purposes only.
Notice a pattern? Bitcoin’s returns are lower in currencies that have risen a lot this year, higher in currencies that haven’t risen much, and highest in the U.S. dollar (which has declined in 2025).
What does this mean? A couple of things:
Some of Bitcoin’s rally in U.S. dollar terms is due to the weakness of the dollar, not the strength of Bitcoin. Bitcoin’s year-to-date returns in strong currencies, such as the Euro and the Swiss Franc, are less than half of its dollar returns. With that in mind, Bitcoin investors may not want to get too excited about the current rally, as a portion of it seems to be the result of the dollar depreciating against Bitcoin. But there’s a glass-half-full interpretation of that.
Bitcoin may finally be starting to act like a real hedge against the U.S. economy. Bitcoin advocates have long claimed that the cryptocurrency would be useful as a safe-haven asset whose value was uncorrelated with the stock market, the dollar and the broader economy. Until recently, that claim was dubious; Bitcoin has moved in sync with stock indexes such as the Nasdaq composite for much of its history. But it looks like things are different in 2025: Bitcoin seems to be holding its value against a declining dollar.
Does this signify that Bitcoin has proven itself as a tariff-proof, inflation-proof, dollar-proof investment? Not quite yet, but investors may want to keep an eye on this trend and see if it continues.
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The author owned Bitcoin at the time of publication.