The performance of the US dollar index in 2025 has been unprecedented in recent years. The annual decline reached 9%, marking the worst performance since 2017, ultimately breaking below the 98 level. Behind this figure reflects deep changes in Federal Reserve policies and global capital flows.

What’s more noteworthy is the 2026 forecast from institutions. Recent research from multiple investment banks indicates that the dollar will face about 3% downside pressure, with the highest probability of wide fluctuations within the 96-103 range. This seems to be a matter of the foreign exchange market, but for cryptocurrency investors, it’s a signal worth exploring deeply.

Why? Historical data speaks clearly. The US dollar index and crypto assets have long had an inverse relationship. During the dollar index plummet of 50 points in April 2023, Bitcoin surged by 12% within three days. On the day the Federal Reserve cut interest rates in December last year, the dollar fell by 0.43%, and trading volume in the crypto market increased by 30%. These are not coincidences but inevitable results of capital flow.

The current question is not "Will the dollar continue to weaken?" which has almost become a consensus. The real questions are twofold: First, at what pace and magnitude will the dollar decline? Second, during this process, which sectors of the crypto market will first attract capital.

The core signal comes from the Fed’s policy expectations. By 2025, the Fed has already initiated a rate-cutting cycle. How this trend will evolve in 2026 will directly determine the liquidity tightness. If rate cuts exceed expectations, it’s like injecting a strong dose of confidence into the market, causing trading volume and prices in the crypto market to rise accordingly. This is what’s called the "liquidity big gift package."

Meanwhile, the dovish stance of the Fed’s decision-makers is also reinforcing this expectation. When the central bank’s key policymakers focus more on employment than inflation, market confidence in easing policies will strengthen, and the attractiveness of risk assets will increase.

Based on this logical framework, the beneficiary paths for the crypto market during the dollar’s decline cycle are becoming clearer. When liquidity is abundant, investors seek higher-yield asset allocations. As a high-volatility, high-return option, the crypto market naturally attracts incremental capital.

The key is to identify which crypto sectors will become the first choice for capital. This requires considering the pace of macro liquidity release, changes in market risk appetite, and the fundamental support of different sectors. In the context of a weakening dollar, assets with scarcity, application prospects, and on-chain activity tend to perform better.