The U.S. dollar is sliding, and it looks like it’s by design. The Federal Reserve has been pumping liquidity into the system, cutting rates three times in 2025, and selling Treasuries, which is weighing on the dollar.
Investors are clearly noticing. Bond markets are losing their appeal as the DXY drifts to multi-month lows, reflecting signs of a weaker U.S. economy. Combined, these factors are pushing capital out of the haven.
History shows this kind of setup often triggers strong rallies in risk assets. Back in March–September 2025, for instance, the DXY fell nearly 10%, and Bitcoin [BTC] rode that wave up roughly 33% to a $126k peak.
But in this cycle, a clear divergence is emerging.
As the Kobeissi Letter points out, silver prices are now outperforming Bitcoin by one of their widest margins on record. Over roughly 13 months, silver has surged by about +270%, while Bitcoin has declined by 11%.
Other metals are showing a similar pattern. Gold, for instance, is moving stronger relative to Bitcoin, with the BTC/Gold ratio breaking a key support level and sliding to a multi-year low of 17.35/oz.
From a sentiment standpoint, this divergence is a pretty clear signal that investors’ risk appetite is falling, with money flowing away from assets like Bitcoin. The bigger question, though, is what’s really driving this rotation?
Bitcoin under pressure as AI-driven flows shift capital
Analysts see the current rotation out of Bitcoin as strategic, not random.
Driving this shift is the ongoing AI boom. UNCTAD reports that AI-driven data centers became a major investment theme in 2025, with spending up 14%, topping $270 billion, fueled by surging demand for AI infrastructure.
That demand is now pushing metals higher, and analysts say this is just the beginning. A copper supply crunch could be next, as AI-driven copper demand is expected to surge +127%, reaching 2.5 million tonnes by 2040.
Put simply, this helps explain why the current rotation out of Bitcoin into traditional safe havens isn’t just a routine hedge against a falling dollar, tariff wars, or the possibility of another government shutdown.
Instead, it’s a strategic, AI-driven shift in capital flows. Investors are looking long-term, betting that AI infrastructure will drive a major supply-demand imbalance, with copper sitting squarely at the center of this trend.
In this context, Bitcoin’s current squeeze against these metals isn’t merely a reflection of fading short-term risk appetite. Instead, it could mark the beginning of a deeper divergence between crypto and industrial metals.
Final Thoughts
- While the dollar weakens and metals surge, Bitcoin lags, signaling a deeper divergence and falling risk appetite for crypto.
- Investors are strategically moving capital out of Bitcoin into metals like copper, silver, and gold, driven by long-term demand from AI infrastructure.
