Bitcoin already sets all-time high against the US dollar index

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You might know that the US dollar has been pummeled this year. 

The DXY index — which prices the greenback against a basket of currencies — is down 12% since mid-January, practically erasing all of its gains over the past five years.

Granted, DXY has its problems . It’s heavily skewed toward the dollar’s exchange rate in Europe, with more than half of its weight assigned to the euro, as well as 20% or so spread unevenly across the British pound, Swedish krona and Swiss franc. 

The Japanese yen is the only featured currency from Asia, with about 14%. The renminbi is excluded altogether, and the US dollar is down only about 2.5% against the yuan since mid-January.

The orange line is BTC/USD, the purple line is BTC/USD adjusted for DXY’s volatility starting one year ago, and the blue line is DXY.

As you can see, this quickly gets messy. Bitcoin is up almost 12% in the past six months, while the DXY is down by almost the same percentage. Does that mean bitcoin is about even?

Well, whether it’s over five years, three or one, BTC/USD is vastly outperforming major assets and benchmarks. 

Bitcoin (priced in US dollars) is beating crude oil, gold, the S&P 500 and the Nasdaq 100. 

Not shown: bitcoin trailing Nvidia stock over the three-year and five-year horizons.

Let’s instead see the price of bitcoin, denominated in each of those majors. It’s similar to how we’d measure the price of ETH in BTC terms with the ETH/BTC ratio .

Bitcoin’s ratio with the S&P 500, Nasdaq 100 and crude oil topped out in late May, and we’re still just shy of all three.

That’s in line with bitcoin’s current standing against the US dollar (in raw dollar terms, not DXY), only 2% short of a new price record.

Luckily, there are many different kinds of all-time highs.

The gold/bitcoin ratio, however, is almost 20% below its all-time high from a week before Christmas 2024.

But what would this newsletter be without something to celebrate?

When bitcoin hit $110,500 earlier this morning, on Coinbase, that was actually an all-time high against DXY — 1139.58 — around 2% higher than the previous peak in late May. 

A minor victory, considering the DXY’s flaws. But a win is a win.

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