Bitcoin’s struggle to mirror gold’s reflationary surge amid a collapsing dollar has sparked a debate over its identity as either a hard asset or a high-beta risk vehicle. The US dollar index fell to 95.566, its weakest level since February 2022, after former President Trump dismissed concerns about the slide.
Meanwhile, gold surged to $5,266.37 per ounce and silver climbed to $115.40, extending multi-month rallies. Bitcoin (BTC) attempted to reclaim $90,000 but lagged behind commodities in the reflationary environment.
Andre Dragosch of Bitwise Europe described the dollar decline as a textbook reflation scenario, calling Bitcoin 'ridiculously undervalued' in this context.
Federal Reserve uncertainty and policy debates have created two distinct 'weak-dollar regimes': one favoring liquidity-driven assets and another amplifying risk premiums. Academic analysis from 2025 suggests the Bitcoin-dollar correlation is unstable, episodic, and horizon-dependent.
Germany’s BaFin warned of risks to dollar credibility and short-term vulnerabilities for German banks tied to dollar refinancing. The divergent behaviors highlight structural differences in how markets perceive Bitcoin versus traditional safe-haven assets.
Andre Dragosch said:
"The dollar decline is a textbook reflation scenario. Bitcoin’s current valuation feels like a mispricing in this context."
Look, the split between Bitcoin and gold suggests investors are still sorting out whether crypto is a store of value or a speculative play. If the Fed’s policy ambiguity persists, this divide could widen further.
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