Declining US dollar indicates a robust quarter ahead for cryptocurrency – Raoul Pal

Real Vision CEO and former Goldman Sachs executive Raoul Pal says the weakening US dollar could give the crypto market a major boost in the second quarter of this year.

“With the dollar, rates and oil headed lower (all specific aims of Bessent), financial conditions are now easing fast and lead risk assets by a couple of months,” he said in a March 5 X post.

“Should signal a good Q2 for tech and crypto and hopefully H2 2025 too as these trends continue…,” he added.

Pal’s post comes just 24 hours after US Treasury Secretary Scott Bessent shared his plan to reduce interest rates in the US.

Crypto market rebounds after Trump tariffs spook global financial markets, send US dollar tumbling

The crypto market cap plunged from above $3.2 trillion to below $3 trillion in the last few weeks, TradingView data shows. Last week, the digital asset space’s total valuation plummeted to a low of around $2.55 trillion following US President Donald Trump’s tariffs. 

China, one of the nations slapped with tariffs, immediately retaliated and imposed 10-15% tariffs on US farm products. China’s embassy also said on X, “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”

Trump’s tariffs have subsequently ignited fears of a global trade war, which has negatively impacted the US dollar index. According to TradingView data, the index has fallen more than 3% in the past week.

While the US dollar index falls, the crypto market seems to be recovering. In the last 24 hours, the market cap has risen over 5%. Bitcoin has also erased its losses from the past week to trade at $92,563.12 as of 12:45 a.m. EST.

According to crypto trading resource Bitcoinsensus, the bearish US dollar index has historically been bullish for Bitcoin.

The Dollar Index is collapsing for the last 24h, losing a major support level, value area high of the last 3 years, historically a bearish $DXY means one thing, bullish #Bitcoin long term if drop continues the next coming weeks pic.twitter.com/eowS7sPfhL

— Bitcoinsensus (@Bitcoinsensus) March 5, 2025

Investor sentiment rises ahead of first White House crypto summit

The rise in the crypto market seen in the past 24 hours coincides with improving investor sentiment. After plunging to an “Extreme Fear” reading of 10 last week, the Crypto Fear and Greed Index now stands at 25, still signaling “Fear.” 

As investors remain fearful, Trump is gearing up to welcome multiple Web3 industry leaders to the White House for its first Crypto Summit tomorrow. Some of the industry leaders who have confirmed their attendance include Coinbase CEO Brian Armstrong, Chainlink co-founder Sergey Nazarov, Exodus CEO J.P. Richardson, and Strategy (formerly MicroStrategy) Chairman Michael Saylor.

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