How De-Dollarization is Fueling The Everything Rally
Global markets remain in a cycle powered by fiscal largesse and liquidity support, not monetary tightening. Governments are driving growth through tax cuts, reshoring, deregulation, and industrial policy, while central banks manage debt burdens through financial repression by keeping real rates negative or near zero.
Inflation is stabilizing around 3% (above the Fed’s 2% target), which means real yields remain capped even as nominal GDP stays strong. The Federal Reserve just cut rates by 25 basis points, and Fed funds futures are pricing in two additional cuts this year, reinforcing the market’s shift toward easier policy and a weaker US dollar.
This combination of loose fiscal and forgiving monetary policy is inherently de-dollarizing. It weakens the USD, raises global liquidity, and drives capital into hard and financial assets. We remain convicted that the Everything Rally is underway, lifting equities, gold, commodities, and Bitcoin.
Dollar weakness continues to drive institutional flows into non-sovereign stores of value, while expanding liquidity pushes Bitcoin higher.
TLDR: Fiscal dominance and structural liquidity expansion are driving the Everything Rally. A weaker US dollar is bullish for Bitcoin.
Why the Goldilocks Setup Favors Bitcoin
The current top-down market regime remains GOLDILOCKS, with growth strong enough to avoid recession and inflation sticky enough to prevent aggressive tightening. The drivers include robust consumer balance sheets, corporate cash buffers, AI-led productivity gains, and labor hoarding that keeps demand and hiring resilient.
Treasury issuance remains skewed toward short-term bills, which drains less liquidity and continues to drive global liquidity higher. This is a technical tailwind for Bitcoin. Fed Chair Powell remains cautious but dovish, knowing tighter conditions would break funding markets, while other global central banks quietly ease on the margin.
The USD is losing its yield advantage, a signal for capital rotation into risk assets and alternative stores of value. Volatility will emerge from rate speculation or political noise, but underlying liquidity flows and structural dollar weakness make this a buy-the-dip environment.
TLDR: Our base case is Goldilocks. Steady growth, sticky inflation, and a softening US dollar sustain Bitcoin’s macro tailwind.
Scenario Mapping: Bull, Base, and Bear Cases for Bitcoin
Bull Case (≈25%)
AI adoption accelerates, inflation eases faster than expected, and fiscal stimulus (ie/ Trump’s One Big Beautiful Bill Act) persist. Global liquidity spikes as the Fed signals balance sheet expansion or yield curve control.
Outcome: Equities, gold, and Bitcoin rally sharply on real rate compression and US dollar weakness. Bitcoin outperforms as the market begins to price in a full monetary easing cycle.
Base Case (≈55%)
Goldilocks continues with mild inflation, sustained fiscal support, and dovish central banks. Risk assets grind higher with small corrections.
Outcome: A sustainable Everything Rally with periodic shakeouts. Bitcoin trends upward alongside equities and gold, supported by consistent liquidity and gradual dollar depreciation.
Bear Case (≈20%)
Treasury supply overwhelms demand, forcing yields higher. The Fed miscommunicates, creating a funding squeeze or a short-term USD spike as inflation expectations reheat.
Outcome: A brief, broad drawdown across risk assets. Bitcoin sells off with high beta but typically recovers first as liquidity stabilizes and investors rotate back into non-sovereign assets.
The real risk is policy miscoordination in managing fiscal dominance, not recession. Even in a policy error scenario, Bitcoin’s position as a liquid, non-sovereign alternative makes it one of the first beneficiaries once liquidity returns.
TLDR: The biggest risk to the Everything Rally is policy error, not economic slowdown.
Bitcoin will thrive as long as global de-dollarization continues.
Macro conditions have set the stage for the Everything Rally, but the real story is showing up on-chain. Bitcoin’s valuation, momentum, and flow data now reveal how deep this move could run and what comes next.
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