Dollar devaluation could have significant implications for currencies looking ahead, given its current status as the world reserve currency. As the dollar declined, it would give way for other currencies to rise in prominence globally, including bitcoin.
The ICE U.S. Dollar Index (DXY) is down more than 8% YTD, according to Y-Charts Data. The index peaked at 109.64 in early January before declining to 99.51 as of May 6, 2025. Dollar devaluation is a trend that some of the world’s largest asset managers, including BlackRock, believe could allow digital assets and bitcoin to profit from.
“The U.S. has benefited from the dollar serving as the world’s reserve currency for decades. But that’s not guaranteed to last forever,” BlackRock CEO Larry Fink said in an annual letter to investors. “If the U.S. doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like Bitcoin.”
The decentralized nature of bitcoin may prove appealing in a world of declining U.S. dollar dominance and a changing global trade order. The U.S. dollar has been the global reserve currency since the end of World War II. Weakening of the dollar’s value due to significant declining confidence in the U.S. (sentiment) or ballooning U.S. deficit (fundamentals) could be a watershed moment for currencies.
A retreat from U.S. exposures and the dollar by foreign investors and entities would give space for the rise of other currencies, including bitcoin. While much remains in flux and is uncertain for now, it’s a trend to follow in the months and years to come.
Should Dollar Devaluation Continue, Consider BRRR
For those who see opportunity in bitcoin prices looking ahead, whether as a safe haven in a declining dollar environment or from a pure alternatives perspective, the CoinShares Valkyrie Bitcoin Fund (BRRR ) is worth consideration. The fund provides exposure to bitcoin’s price movements with the ease of access through traditional brokerages. Through BRRR, investors can capture bitcoin price movements while avoiding many of the extra steps required with direct bitcoin investment, such as storage.
BRRR seeks to reflect the price performance of the CME CF Bitcoin Reference Rate – New York Variant, minus fees and expenses. This index uses the same six bitcoin exchanges as the CME CF Bitcoin Reference Rate, but calculates bitcoin’s price at New York Market close (4 p.m. ET).
The fund is a trust that passively holds bitcoin (meaning it’s physically backed). Shares held are tied to the value of the bitcoin held. It also is not an investment company, and therefore does not fall under the 1940 Act. The bitcoin held is custodied by Coinbase, BitGo, and Komainu, with private keys kept in cold storage. In other words, the means to access the bitcoin held by the custodians remains offline, disconnected from the internet. This provides an extra layer of protection from hacking.
BRRR carries management fees of 0.25%.
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