The global financial scene right now is ripe with opportunity. Bitcoin’s value proposition is being amplified by a record global money supply and dollar weakness. Bitcoin recently hit a new all-time high of about $110,000 this year. As fears of the dollar’s devaluation increase, more and more individuals are looking to Bitcoin as a legitimate alternative to fiat currencies. The global money supply exploded to an all-time high of $55.48 trillion. With the dollar index falling almost 11% in 2025, Bitcoin’s role in the upcoming finance world is being hotly contested. Bitcoin’s supply rate is currently below 1 percent per year. This constrained supply, along with its growing status as a reserve asset, boosts its appeal as a hedge against inflation and currency depreciation.
Bitcoin's Ascendancy Amidst Monetary Expansion
Bitcoin’s prices have experienced a massive increase, rising up to around $110,000 earlier this year, reaching an all-time high. This increase is especially surprising. It happens all over the backdrop of a surging global money supply, now at an all-time high of $55.48 trillion. The digital asset’s value is skyrocketing, due in part to the rapid expansion of the money supply. After an increase of the M2 in April 2025, Bitcoin gained a 30% price increase within two weeks, illustrating the characteristic of Bitcoin as a high-performing asset in time of monetary expansion.
Bitcoin is very often the last to react. On the down side, you should probably get used to waiting for its answer to major money supply surges for 3 to 6 months at least. This lag means the total effect of monetary policy shifts on Bitcoin appreciation will not be immediately apparent. All investors have to adopt a longer term perspective to appreciate the full impact. Bitcoin lost more than 70 percent of its value by the end of the deep bear market of 2022.
Additionally, Bitcoin’s supply rate is intentionally reduced over time and has dropped below 1 percent per year, increasing the asset’s scarcity narrative. Unlike other fiat, Bitcoin does not have an upper bound. That tight supply is producing fierce demand. This self-reinforcing dynamic can push its value up over time, further establishing it as a trusted store of value.
The Dollar's Diminishing Strength
The dollar’s dominance has been a foundation of the global financial system for decades. Today it’s under attack, and these assaults are hurting its worth, viability and even existence. The dollar index gauges the greenback’s strength against a basket of its peers. In 2025, meanwhile, it has fallen almost 11%, reflecting a dramatic decrease in its relative strength. Over the past several months, the dollar is on track for its worst performance since the collapse of the Bretton Woods system between 1971 and 1973. An age defined by serious instability in the global monetary system.
Meanwhile, over the last century, the dollar has lost more than 96 percent of its value. This steep drop retraces the historic, multi-decade loss of its value. On the surface, the dollar doesn’t seem very different at a nominal value of $1. The actual value of that money is slowly eroding because federal rules do not allow inflation to go above 2 percent a year. Through this slow, steady devaluation, they hope to boost growth and employment. It also slowly confiscates the wealth of savers and investors, pushing them to seek other places to park their money.
The dollar is only losing value because the rest of the world is printing so much money. This expansion further lessens its value against other forms of assets. As governments around the world print more money to stimulate their economies, the dollar's share of the global monetary pie shrinks, further contributing to its depreciation.
Bitcoin as a Hedge Against Dollar Weakness
The current economic climate, characterized by a record global money supply and a declining dollar, has fueled interest in Bitcoin as a potential hedge against currency devaluation. Bitcoin’s decentralized nature and capped supply add to its allure among investors. Its increasing legitimacy as a store of value is an important bulwark against inflationary encroachments on wealth. This is particularly relevant since there seems to be an unmistakable negative correlation between Bitcoin and the dollar.
Now some governments, most notably El Salvador and the United States, have embraced Bitcoin as a reserve asset. This action strengthens the narrative of Bitcoin as a safe haven asset. As an industry, this recognition is a monumental victory in our goal to change the way the world thinks about Bitcoin. It would enable their greater acceptance and integration into the global economy.
That said, we must recognize that there are real risks associated with Bitcoin. Its price volatility, regulatory uncertainties, and potential for technological disruptions are still troubling to investors. Even considering these hurdles though, Bitcoin continues to stand out as an excellent hedge against dollar weakness. Its increasingly mainstream acceptance as a store of value continues to fuel its allure in today’s economic landscape.
