As Bitcoin price continues to rise, the dollar has its worst month in a decade

Bitcoin hit a new high of around $11,740 in 2020. While digital assets are trending upward, the U.S. dollar has been losing value.

US Dollar Index Chart

The dollar began to depreciate sharply
In mid-March, the dollar, like other asset classes such as Bitcoin, gold or stocks, began to fall, with the US Dollar Index (DINIW) starting at 102.7 points. But before the end of that month, it returned to the rising range, where it remained until May.
But then it started to slide again, falling to 93 on June 30, although on Friday, it surged to 93.3, with stocks, gold and Bitcoin all experiencing a small pullback. Earlier this week, even Goldman Sachs warned that the dollar is in danger of losing its status as the world's reserve currency.
The dollar's decline is partly due to the money the Federal Reserve has printed to counter losses caused by the pandemic. As part of quantitative easing, the Fed has added $3 trillion to its balance sheet since February while also cutting its benchmark interest rate to zero.
The world's largest economy shrank at a record annualized rate of 32.9% despite unprecedented monetary and fiscal stimulus from the Federal Reserve and the U.S. government, the data showed.
While the dollar still dominates transactions and foreign exchange reserves, its power is waning. In terms of total imports and exports in global trade, the United States lags behind the eurozone and China.
Unlike the U.S. dollar, Bitcoin cannot be ruthlessly printed at will, and its total supply is 21 million. Most importantly, it does not require physical storage like gold and is censorship-resistant.
Bitcoin is a form of “fool insurance”
Because digital assets pose a threat to the government's monetary capabilities, they are increasingly attracting the attention of policymakers. Governments around the world are now studying digital versions of their own currencies. Tom Lee, co-founder of Fundstrat Global Advisors, said, "In short, trust in the traditional financial system is being broken, and this is the theme. The less you trust the dollar, the more you want other options."
Gold, which hit a new high this week, and Bitcoin, which has risen 58.8% in 2020, are among those alternatives. Earlier this week, Bitcoin broke through the key $10,000 level, and the last time the digital asset broke through the five-digit price mark, it triggered a wave of Bitcoin investment and hit an all-time high of $20,000.
It reached that level before the flagship cryptocurrency crashed in March, but that rally was snuffed out by the spread of the pandemic. It remains to be seen whether things will be different this time around.
But what’s different this time is the growing interest in the asset from the likes of billionaire investor Paul Tudor Jones, who has called it a hedge against inflation amid unprecedented central bank action. Jones revealed that he holds 1% to 2% of his assets in Bitcoin to provide protection in a world of low interest rates. Renaissance Technologies flagship fund Medallion also received approval to invest in Bitcoin futures in April.
According to research firm Kaiko, if the digital asset of Bitcoin rebounds again like it did in 2017, then Bitcoin is like a kind of "foolish insurance" because about 60% of the Bitcoin supply is currently hoarded, while 20% of Bitcoin is lost or has not been moved. (Baijiahao)