Bitcoin and Euro Gain as Investors Flee U.S. Dollar Amid Market Turmoil

In a notable shift, options data reveals rising bullish sentiment for bitcoin (BTC) and the euro (EUR) as investors rotate away from U.S. assets. Despite sharp declines in the U.S. stock market, short- and near-dated bitcoin risk reversals turned slightly positive, indicating growing demand for call options over puts—a sign of bullish expectations. Similarly, one-month EUR/USD risk reversals flipped to favor euro calls, signaling confidence in a stronger euro against the dollar.

This trend underscores what analysts are calling the acceleration of the "sell America" trade. Investors are increasingly seeking refuge in alternative assets like bitcoin, the euro, and gold, as confidence in the U.S. dollar and equities wanes.

The shift in sentiment comes amid heightened policy uncertainty tied to President Trump’s trade war rhetoric and reports of his desire to remove Federal Reserve Chair Jerome Powell. These developments have fueled fears of destabilization in U.S. monetary policy.

As a result, the Dow Jones Industrial Average plunged over 700 points Monday, pushing its monthly losses to more than 9%. Simultaneously, the U.S. dollar index dropped to a three-year low of 98, down 10% in three months. Yields on 30-year Treasury notes surged to 4.90% as bond prices fell.

Bitcoin soared past $88,000 while the EUR/USD climbed to 1.1575, its highest level since late 2021. Gold surged to a record-breaking $3,495 per ounce, signaling increased demand for safe-haven assets. According to Exante Data CEO Jens Nordvig, markets are undergoing a historic asset allocation shift, prompting investors to rethink traditional strategies.