JPMorgan Chase: Dollar weakness is influenced by short-term sentiment; Bitcoin considered a risk asset

The US Dollar Index (DXY) has dropped by 10% over the last year, leading to an increase in hard assets like gold. However, Bitcoin has underperformed, falling by 13% during the same period.

JP Morgan attributes the dollar’s weakness to short-term market sentiment rather than long-term economic shifts, marking Bitcoin as a liquidity-sensitive risk asset compared to gold and emerging market assets, which are preferred for dollar diversification.