Bitcoin Falls Below $60,000 as Hawkish Fed Kills the Weak-Dollar Trade

Bitcoin fell below $60,000 this week for the first time since 2024, trading just under $59,230 as money fled toward AI and chip stocks. The token is down roughly 43% over the past year. A little over a year ago it traded above $126,000, the top of a two-year run that gained about 350%. That run had a thesis. The thesis just broke.

The Sell America trade

The story that drove it was a weak dollar. Investors bet that swelling US debt, tariff-driven inflation, and political pressure on the Fed would erode the currency and push capital into scarce assets. It worked for a while. After Trump's election win the dollar index dropped 5.6% in a year, gold hit a record $5,589 an ounce in late January, and Bitcoin printed its own highs. Now the dollar index sits at its strongest in more than 13 months, and the trade known as Sell America is dead.

How the Fed killed it

What killed it was the Fed. Ed Yardeni of Yardeni Research said he doubted the Sell America narrative from the start, and that it lost momentum once tariff fears eased and recession worries faded. The blow landed when new Fed chair Kevin Warsh used his first policy meeting to prioritize price stability. Deutsche Bank's Marion Laboure put the mechanics plainly: much of the 2024 and 2025 institutional case for Bitcoin rested on a coming rate-cut cycle, and that assumption has flipped. When the risk-free rate climbs, the cost of holding an asset that yields nothing climbs with it, and Bitcoin starts trading like a liquidity-sensitive risk bet rather than a safe haven.

The money is voting. Spot Bitcoin ETFs have bled about $6 billion over six straight weeks, one of the worst outflow streaks in two years, and much of it has rotated into technology. The PHLX Semiconductor Index is up 158% over the past year while Bitcoin fell 43%, with Micron's strong earnings and two-year demand forecast feeding the bid for chips.

Strategy's underwater bet

Nowhere is the reversal sharper than at Strategy. Its shares have lost more than 70% in six months and slipped below $100 this week, also a first since 2024. Last month it sold Bitcoin for the first time since 2022. The company's stock is worth $32.3 billion against roughly $51 billion in coins, yet its average purchase price is $75,651, about 20% above where Bitcoin trades now. The biggest corporate believer is underwater on its own bet.