As Dollar Index Dips to Three-Year Low, Bitcoin Continues to Show Stability

China’s Tariff Increase Drives Dollar Index Below 100; Bitcoin Holds Steady Amid Market Volatility

In a sharp escalation of the trade dispute, China has raised tariffs on U.S. goods to a cumulative 125%, signaling an intensified stance in the ongoing economic battle between the two superpowers.

The U.S. Dollar Index (DXY), a key measure of the dollar’s strength against a basket of foreign currencies, has fallen below the crucial 100 level for the first time since April 2022. The index has dropped more than 10% from its recent peak of 110, now reaching its lowest point in three years.

The shift in investor sentiment away from U.S. assets is exacerbating the dollar’s decline, particularly as the trade war with China continues to affect global economic stability. Research from CoinDesk in January noted that the DXY index was following a pattern similar to what was seen during President Trump’s first term, and that trend seems to be materializing.

Just before press time, China’s announcement of the tariff hike, from 84% to 125%, made it clear that the trade conflict is unlikely to ease anytime soon, further pressuring the U.S. economy.

In contrast to the volatility in the dollar and broader financial markets, bitcoin (BTC) has remained resilient. The cryptocurrency continues to trade above $81,000, underscoring its role as a stable asset in times of uncertainty, particularly as it behaves like a low-beta asset compared to traditional equities.

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