$Invesco QQQ(QQQ)$ $SPDR S&P 500 ETF Trust(SPY)$ DJIBTC.XETH.XI've been pointing out this inverse correlation to investors for over three years, but given the comments and misinformation I've seen in recent months, I think it's worth repeating. Bitcoin (and ETH), right or wrong, currently operates like a foreign currency. When US domestic interest rates rise, or there's a perceived risk they will, the USD strengthens relative to other currencies due to foreign investment and higher yield prospects. Look at the inflationary pressures over the last six months, cross-reference that with the Fed's pivot from potential rate cuts to possible hikes in 2026, and the concurrent movement of the DXY. Now overlay the DXY with BTC over the last 5-10 years, and you'll see an almost perfect inverse correlation. In summary: the USD is strengthening on the premise of future rate hikes and a rising 10-year yield, which devalues other currencies including BTC. In my opinion, if and when inflation risk subsides, future rate hike expectations are reversed and the DXY falls, BTC will rise.
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