A hawkish shift from the Federal Reserve is reversing the popular trade that grouped bitcoin with precious metals as hedges against a weakening dollar. As expectations for tighter monetary policy strengthen the dollar, investors are unwinding positions across these so-called safe-haven assets. Bitcoin, often promoted as a digital alternative to gold and silver, is now falling in tandem with those metals rather than diverging from them. The synchronized decline underscores how closely bitcoin's price moves can track macroeconomic conditions and shifts in central bank policy. For traders who viewed cryptocurrency as an independent store of value, the correlation challenges that narrative, at least in the near term. The selloff highlights bitcoin's sensitivity to interest-rate expectations and dollar strength, suggesting its behavior during this cycle resembles risk and inflation-hedge assets more than a distinct, uncorrelated investment class.
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