Yes, relatively. The dollar has strengthened against risk assets, not just against other currencies, for several reasons that have aligned recently:
Key factors behind the strong dollar
Expectations of stricter monetary policy in the U.S.
The nomination of Kevin Warsh (perceived as more “hawkish”) reinforced the idea that interest rates could remain high for longer.
High rates → USD assets more attractive.
Global “risk-off” environment
When there is macro, geopolitical, or financial uncertainty, the market tends to:
sell volatile assets
seek refuge in liquidity (USD, Treasury bonds)
Positive real yields
If holding dollars or bonds pays 'something' and the risk is low, many funds reduce exposure to crypto, tech, growth, etc.
📌 Important: it is not that the dollar is 'perfect', but rather that it is the dominant refuge when fear increases.
🔻 Does that trigger sales in cryptocurrencies?
Yes, and it is a very clear historical pattern.
The typical mechanism is this:
Risk aversion increases
Leveraged and speculative positions are reduced
Volatile assets (crypto, small caps, tech) are sold
Capital moves to:
dollars
Treasury bonds
cash
Gold
Bitcoin and altcoins continue to behave as 'risk assets' in these contexts, not as a short-term refuge.
👉 Although many see Bitcoin as 'hard money' in the long term, in the short term it trades as a macro risk asset.
⚠️ But be careful: it is NOT ONLY the dollar
It would be a mistake to say that everything is due to the dollar. There are several simultaneous layers:
🔹 1. Technical liquidations
A lot of leverage accumulated in crypto
When key levels break, automatic liquidations are triggered
This accelerates the drop, regardless of the dollar
🔹 2. Outflows (ETFs and funds)
Fewer recent institutional inflows
Some funds reduce exposure to lower volatility
🔹 3. Market psychology
Fear triggers defensive sales
The crypto market amplifies movements (less liquidity than equities)
📌 A strong dollar acts as a catalyst, but the structure of the crypto market amplifies the movement.
🧠 So, what is really happening?
A simple way to see it:
It is not that people 'love the dollar', but rather that in times of stress they prefer liquidity and security.
And today:
USD offers liquidity
Offers yield
Reduces portfolio volatility
This explains why positions in crypto are closed and temporarily migrate to dollars or other defensive assets.
⏳ Is it something temporary?
Historically:
✅ Yes, it tends to be cyclical
Periods of a strong dollar and 'risk-off'are not permanent
When:
uncertainty decreases
expectations of rates change
appetite for risk returns
…capital tends to return to assets like crypto.
📌 But no one can guarantee exact timing. These cycles can last weeks or months.
🧩 Short summary
✔️ Yes, the strengthening of the dollar is real and is influencing
✔️ Yes, there is a rotation from crypto to USD and defensive assets
✔️ It is not the only cause: there are also liquidations, outflows, and fear
✔️ It is a historically repeated macro pattern
✔️ It does not imply that 'crypto is dead', but rather a temporary change in risk regime
This is general information only and not financial advice. For personal guidance, please talk to a licensed professional.