Bank of America Warns of Continued US Dollar Weakness, Signaling Bullish Outlook for Crypto and Risk Assets

Bank of America (BofA) has issued a sustained bearish outlook on the US dollar, pointing to multiple macroeconomic factors weakening its strength. Earlier analysis noted a strong end-of-month corporate demand for dollars, pushing up the DXY index and tightening global liquidity, historically putting downward pressure on cryptocurrencies like Bitcoin. However, BofA’s latest report emphasizes an anticipated prolonged decline in the US dollar, driven by expectations that major central banks outside the US will tighten monetary policy or maintain higher rates, reducing the greenback’s yield advantage. Additional headwinds include improved economic growth outside the US, growing fiscal concerns over US debt and spending, and the potential loss of the dollar’s safe-haven status if global volatility subsides. For crypto traders, a weaker US dollar typically supports higher prices and increased interest in digital assets, including Bitcoin, as investors seek alternatives and hedges against fiat debasement. BofA’s updated forecast suggests a shift toward a more supportive environment for cryptocurrencies, commodities, and emerging markets, but cautions that unexpected US economic resilience, financial crises, or aggressive Fed action could still buoy the dollar. Crypto traders are advised to closely monitor macroeconomic trends, liquidity flows, and diversify holdings as USD weakness could create upward momentum for cryptocurrencies while enhancing market volatility.