Greenback Weakens as DXY Slips Under 98, Clearing Path for Digital Asset Upside

Dollar Weakens Below 98 for First Time Since 2022, Paving Way for Crypto and Risk Asset Upside

The U.S. dollar slipped to a key threshold Wednesday as the Dollar Index (DXY) fell below 98, its lowest level since early 2022 — a move that’s reverberating across global markets and boosting sentiment for risk assets, including bitcoin (BTC).

The decline signals a turning point for global currency flows, with the greenback losing ground amid cooling U.S. inflation and rising expectations for policy easing by the Federal Reserve. Historically, a weaker dollar environment has supported asset classes tied to growth and liquidity, such as equities, emerging markets, and crypto.

Inflation Miss, Rate Cut Bets Pressure Dollar

The catalyst behind the DXY’s latest leg down was a softer-than-expected CPI print, showing 2.4% annual inflation in May — slightly below economists’ expectations. That small miss carried big weight: rate futures now assign a 99.8% probability of a rate cut at the Fed’s June meeting, with the new range likely falling to 4.25%–4.50%, according to the CME FedWatch Tool.

As real yields retreat and liquidity expectations rise, investors are repositioning across risk-sensitive assets.

Political Risk and De-Dollarization in Focus

Beyond inflation, the dollar is also contending with structural and geopolitical headwinds. Ongoing concerns about U.S. fiscal health, de-dollarization efforts by emerging economies, and uncertainty around President Trump’s tariff and trade agenda have contributed to a growing loss of confidence in the dollar as the world’s reserve currency.

Crypto Positioned to Benefit

For bitcoin and the broader digital asset market, the weakening dollar arrives at a pivotal time. With liquidity conditions poised to loosen and institutional crypto adoption gaining traction, many investors see the DXY breakdown as a potential spark for a renewed crypto uptrend.