Weaker dollar fails to spur bitcoin gains, but there's a reason for that, JPMorgan says

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Weaker dollar fails to spur bitcoin gains, but there's a reason for that, JPMorgan says Gold and other hard assets are rallying on dollar weakness, but bitcoin is lagging as markets continue to treat it as a liquidity-sensitive risk asset. By Sam Reynolds | Edited by Sheldon Reback Jan 29, 2026, 8:53 a.m. Make us preferred on Google (geralt/Pixabay modified by CoinDesk) What to know : Bitcoin has, unusually, not rallied alongside the slide in the U.S. dollar. JPMorgan strategists say the dollar’s weakness is being driven by short-term flows and sentiment, not changes in growth or monetary policy expectations, and they expect the currency to stabilize as the U.S. economy strengthens. Because markets do not view the current dollar decline as a lasting macro shift, bitcoin is trading more like a liquidity-sensitive risk asset than a reliable dollar hedge, leaving gold and emerging markets as the preferred beneficiaries of dollar diversification. The weaker dollar is failing to spur bitcoin's BTC $ 88,126.87 usual rally, and J.P. Morgan Private Bank explains the unexpected behavior as a window into the nature of the U.S. currency's decline. The Dollar Index (DXY), which measures the greenback against a basket of peers, has dropped 10% in the past year. Bitcoin, which historically gains during periods of dollar weakness, lost 13% in the same period, CoinDesk data show. The CoinDesk 20 index (CD20), a measure of the largest digital assets, fell 28%. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy . The difference this time is that the dollar is being driven by short-term flows and sentiment rather than a shift in growth or monetary policy expectations, with U.S. rate differentials still moving in the dollar’s favor, according to strategists at the bank. "It’s crucial to note that the recent dollar slide isn’t about shifts in growth or monetary policy expectations," Yuxuan Tang, J.P. Morgan Private Bank's head of macro strategy in Asia, said in a note shared with CoinDesk. "If anything, interest rate differentials have actually moved in the USD’s favor since the start of the year. What we’re seeing now, much like last April, is a USD selloff driven primarily by flows and sentiment," Tang continued. The bank's view is that the weakness will, ultimately, prove temporary, like last year, and that the dollar will eventually stabilize as the world's largest economy picks up steam throughout the year. That helps explain why bitcoin has failed to behave like a classic dollar hedge. While gold and other hard assets have rallied as the greenback fell, BTC has remained range-bound, suggesting the crypto market do not see the dollar's slide as a durable macro shift. As a result, bitcoin is still trading more like a liquidity-sensitive risk asset than a default store-of-value trade . Without a clear shift in monetary policy expectations, dollar weakness alone has proven insufficient to pull new capital into crypto markets. J.P. Morgan Private Bank’s framework also points investors toward assets such as gold and emerging-market exposure as more direct beneficiaries of dollar diversification, rather than bitcoin. Until growth or rate dynamics take over from flows and sentiment as the primary driver of currency markets, the largest cryptocurrency may continue to lag behind traditional macro hedges, even if the dollar remains soft. btc Dollar index JPMorgan Bitcoin News Analysts More For You Pudgy Penguins: A New Blueprint for Tokenized Culture By CoinDesk Research Dec 30, 2025 Commissioned by Pudgy Penguins Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale. What to know : Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token. The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility. View Full Report More For You Number of wallets with 1 million XRP is rising again By Omkar Godbole , Shaurya Malwa | Edited by Sam Reynolds 2 hours ago On-chain data points to underlying demand for XRP as ETFs pull in over $90 million. What to know : XRP has fallen about 4 percent so far this month, even as on-chain data point to strengthening underlying investor interest. U.S.-listed spot XRP ETFs have attracted a net $91.72 million in inflows this month, bucking the trend of sustained outflows from bitcoin ETFs. 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