Wells Fargo Suggests Bitcoin May Soon See Clearer Skies

Wells Fargo suggests that Bitcoin may soon see clearer skies, pointing to the relationship between the leading digital asset and dollar strength.

2025 has not been the year that Bitcoin and crypto proponents imagined. Instead of sustained market euphoria driven by a pro-crypto U.S. administration, prices have fallen off a cliff as uncertainty hits a peak.

Wells Fargo Points to the DXY

Wells Fargo suggests that Bitcoin may soon see clearer skies by highlighting its relationship with the dollar strength.

An excerpt from a recent report shared by VanEck Head of Digital Assets Research, Matt Sigel, reveals that Bitcoin has a strong 10-week lagging inverse correlation with the DXY, which tracks the dollar’s performance against six major currencies.

> “BTC has consistently tracked the inverted DXY on a 10-week lag, suggesting the current drawdown is a reaction to the strong dollar in Q4 2024, and that the weak environment we have seen since the DXY peaked on January 13 may be more constructive going forward.”
> Source: Wells Fargo
> — matthew sigel, recovering CFA (@matthew_sigel) March 19, 2025

Exploring this relationship, Wells Fargo links Bitcoin’s 25% slump this year to dollar strength in Q4 2024, coinciding with a surge in the index.

But the DXY has recently fallen over 6%, suggesting better prospects for Bitcoin ahead. Wells Fargo isn’t alone; other analysts also recognize similar patterns in the past.

Shifting Global Tides and How It Impacts Bitcoin

Bitcoin tends to decline when the dollar strengthens as the dollar is viewed as a safe haven. In times of uncertainty, investors lean towards the dollar, leaving risk assets like crypto behind.

Despite the current dollar weakening, uncertainty concerning economic growth arises from various geopolitical issues. This scenario raises questions about whether the inverse correlation between Bitcoin and the DXY will hold true.

One possibility for change is if the Federal Reserve accelerates its interest rate cuts to mitigate growth concerns, although inflation remains far from the target of 2%.