Bitcoin Nears $12K as Dollar Declines to 29-Month Low

Bitcoin is drawing bids amid a sell-off in the U.S dollar, with new signs emerging that the largest cryptocurrency is maturing as a global asset class.

At the time of writing, bitcoin is trading near $11,900 – up 2% on the day. Prices reached a high of $11,964 early Tuesday, according to CoinDesk's Bitcoin Price Index.
The dollar index, which gauges the greenback's value against major currencies, is currently trading 0.4% lower at 91.75, the lowest level since April 2018. The greenback is down more than 10% from highs seen in Mach.
"From a macro level, the U.S. dollar has continued to fall since [the Federal Reserve's Jackson Hole meeting], creating a further buying pressure on bitcoin and broader safe-haven commodities such as gold," Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds, told CoinDesk in a WhatsApp chat.

CoinDesk - Unknown — Bitcoin and dollar index daily charts

Investors are selling dollars, possibly on bets that interest rates in the U.S. would remain low for a long time.
The Federal Reserve now has the room to hold rates low for a prolonged period, having signaled tolerance for high inflation last week.
U.S. inflation expectations have continued to strengthen since Fed Chair Jerome Powell's inflation speech at Jackson Hole last week.
The 10-year breakeven inflation rate, or the bond market's expectation of price pressures over the next ten years, rose to 1.8% on Monday, the highest level since Jan. 2, according to the Federal Reserve Bank of St. Louis.
Long-term inflation expectations have more than tripled in the past 5.5 months to 1.8%.
Additional bullish pressure for bitcoin may be stemming from ether's rise to two-year highs near $470.
"Bitcoin is showing significant strength today on the back of recent gains in ethereum and the broader alternative cryptocurrencies," Dibb said, citing increased buying in the $12,000 call option expiring in September as evidence of the market's short-term bullish mood.
The Singapore-based QCP Capital noted in its Telegram channel that "there was a flurry of put buying on Monday and more of such hedging flows may be seen in the next weeks if bitcon is held below $12,500."

Also read: Ether Price Hits 2-Year High

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