Dollar Weakness Spurs Rotation Toward Crypto and Alternative Assets in 2025

The U.S. dollar index has fallen 8.8% year-to-date, triggering renewed investor appetite for cryptocurrencies, gold, and alternative income products. Portfolio strategists attribute the slide to narrowing rate differentials and renewed fiscal-deficit worries. Bitcoin and Ethereum have attracted incremental allocations from hedge funds hedging currency exposure, while tokenized-bond products gained traction among institutions. Analysts said the move diversifies away from dollar-denominated debt as real yields flatten. Broader market rotation underscores how macro liquidity shifts continue to shape cross-asset flows entering the final quarter of 2025.