JPMorgan: Most market participants do not view BTC as a dollar hedge

The concurrent decline of Bitcoin and the U.S. Dollar Index (DXY) over the past year indicates that the cryptocurrency market is primarily driven by short-term capital flows and investor sentiment, according to an analysis by JPMorgan. CoinDesk reported that Yuxuan Tang, JPMorgan's head of Asia macro strategy, noted in a recent report that while a weaker DXY is typically favorable for risk assets like BTC, the cryptocurrency has fallen 13% while the DXY dropped 10%. Tang asserted this suggests the market perceives BTC as an asset sensitive to liquidity rather than a reliable hedge against the dollar. He added that many investors looking to diversify away from the dollar prefer assets like gold or emerging market stocks. The report concluded that it will be difficult for Bitcoin to match the rally in traditional safe-haven assets without a clear shift in future monetary policy.