2025 has not been smooth for Bitcoin (BTC) and the overall crypto market as anticipated. Many investors expected digital prices to skyrocket under a pro-crypto U.S. government, but Bitcoin has dropped sharply instead. The digital market continues to struggle as uncertainty remains high. Wells Fargo, one of the biggest financial institutions in the U.S., is optimistic that the leading crypto asset could recover soon. The bank revealed the asset’s price is linked to the strength of the U.S. dollar. Since there is doubt concerning the strength of fiat currency, Bitcoin might rise again. However, things are not that simple. Wells Fargo Explained How the Dollar Affects Bitcoin Wells Fargo’s report , shared by VanEck’s Matt Sigel, shows that Bitcoin’s price often moves in the opposite direction of the U.S. Dollar Index (DXY). This index measures the value of the dollar compared to other major currencies. The report revealed Bitcoin price dropped by 25% from its highest point this year. This happened when the dollar got stronger in late 2024. Between September 30 and January 13, the DXY rose nearly 10%, reaching 110.176. However, since then, the DXY index has fallen by more than 6% to 103.197. Wells Fargo believes this decline could help Bitcoin recover. Why a Falling Dollar Might Not Mean a Bitcoin Bull Run This Time Notably, Wells Fargo is not the only one making this case. Earlier this month, Global Macro Investor’s Head of Research, Julien Bittel, pointed out that major Bitcoin rallies have followed past DXY drops. Real Vision CEO Raoul Pal also believes that a softening U.S. dollar, falling interest rates, and lower oil prices could fuel Bitcoin and other digital assets growth. However, this time it is different. The dollar is not falling due to strong economic growth; instead, it is weakening amid uncertainty. President Donald Trump’s tariff policies have raised concerns about economic stability. His approach to foreign relations has also made some question the dollar’s future as the world’s top reserve currency. Many Worries If the Old Patterns Will Hold Bitcoin’s usual relationship with the dollar depends on economic cycles in the financial market. The digital currency usually decreases when the dollar gets stronger, as investors move to safer assets like U.S. treasury bonds. When confidence returns, they shift to riskier bets like Bitcoin. However, unpredictable conditions make it unclear if this trend will continue. One way Bitcoin could increase is if the Federal Reserve cuts interest rates sooner than expected, weakening the dollar further and supporting Bitcoin’s growth. However, inflation is still high, making rate cuts unlikely shortly. For now, Bitcoin’s future remains uncertain. If the dollar keeps falling, Bitcoin could rise, but if economic worries continue, the asset may struggle for longer. The post Wells Fargo Predicts Bitcoin To Recover As the Dollar Weakens appeared first on TheCoinrise.com .
