Dollar Weakness Fuels Hard-Asset Rally as Bitcoin Hits Four-Year Cycle Bottom

The US dollar index fell below its 200-day moving average for the first time in over three months as Bitcoin posted its best week since March 2024. According to Galaxy Digital's analysts, Alex Thorn and Beimnet Abebe, the Treasury's buyback expansion is effectively yield curve control.

The move played directly into the thesis laid out on Galaxy's podcast on Friday, where they discussed that the Treasury's decision to double long-end buyback capacity from $2 billion to $4 billion per operation was not about the dollar amount but about the message. Thorn and Abebe argued that when a government engages in balance sheet manipulation like this, 'your currency should depreciate.'

Galaxy analysts said Bitcoin's four-year cycle bottom was likely in place, with Thorn pointing out that the market had flipped from a 'sell rips' to a 'buy dips' regime. He also noted that the largest cost basis cluster in Bitcoin's supply now sits around $64,000, meaning the bulk of recent buyers are in profit.

Ray Dalio, billionaire founder, warned that the US could face a sovereign debt crisis within three years and recommended allocating 10% to15% of portfolios to gold and holding a modest position in Bitcoin. Thorn and Abebe's thesis also aligned with Dalio's warning about the shift away from dollar-denominated assets.