Wall Street buys 1.7 billion dollar worth of Bitcoins in a week while greenback drops

A falling dollar is causing more and more Wall Street firms to invest in Bitcoin. Last week alone, various Bitcoin ETFs saw a massive inflow of around $1.7 billion, coinciding with the continued decline of the US dollar. This trend reflects the growing interest of investors in Bitcoin as the dollar appears to be losing its importance. By now, it’s trading at 1.17 versus the Euro.

Dollar Index

The US dollar is not doing particularly well. The US Dollar Index (known as DXY), which measures the dollar’s ​​strength against a basket of foreign currencies, fell 1.23% to its lowest level since April 2022.

Investors are essentially betting on a rate cut by the Federal Reserve in September, and are doing so with a probability of more than 90%, according to a FedWatch tool from CEM Group.

Of these, 18% believe the Fed will cut rates by 50 basis points. That would bring key interest rates to a level between 3.75 and 4%.

Interest rates

Lower interest rates generally weaken the dollar, which is already not in great shape. In contrast, an influx into Bitcoin ETFs indicates a growing appetite for risk, both among retail traders and institutional investors. If the dollar continues to fall, it is likely that Bitcoin, which is increasingly seen as a ‘safe haven’ investment, will become even more popular and thus rise in value just as the dollar falls.

Either way, with the influx into Bitcoin ETFs this week, it is clear that Wall Street and institutional investors are betting heavily on the largest digital currency.

It remains to be seen whether this trend will continue, which largely depends on the direction the US dollar takes in the coming weeks.