Bitcoin and the US dollar have stopped caring about their inverse correlation heading into 2021.
The flagship cryptocurrency closed the first quarter more than 100 percent higher as more and more institutions became accustomed to its safe-haven characteristics. For instance, US carmaker Tesla revealed that it replaced $1.5 billion of its cash reserves with bitcoin, stating that it considers the cryptocurrency as a store-of-value.
That was a clear example showing how a big firm chooses bitcoin over the dollar, especially under the impression that the latter would lose its value against other fiat currencies after closing the previous year down 6.80 percent. The analogy itself followed a flurry of sell-side predictions for the dollar, making Bitcoin an emerging safe-haven alternative, an attractive asset for investors.
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But the strong consensus over a weakening dollar started crackling in 2021.
The US dollar index…
….which tracks the greenback’s value against six other major currencies, climbed 3.6 percent in the first quarter.