Bitcoin’s Resilience Amid U.S. Dollar Weakness: What Turkey’s Currency Collapse Can Teach Us

As the U.S. dollar plunges to a three-year low, Bitcoin (BTC) has been proving its mettle, rising even as the broader stock market falters. Trading at $87,000, Bitcoin has seen a 2% gain in just 24 hours, marking a significant step toward its potential role as a safe-haven asset.

This shift away from traditional assets like the dollar toward alternative, decentralized assets such as Bitcoin and stablecoins could accelerate if President Donald Trump proceeds with his efforts to remove Federal Reserve Chairman Jerome Powell. The rumors have already contributed to a drop in the U.S. Dollar Index (DXY) and sent U.S. stock markets tumbling.

Drawing a parallel to Turkey’s ongoing economic struggles offers a glimpse into what might lie ahead for the U.S. Like the Turkish lira (TRY), the U.S. dollar could face a steep decline if central bank interference continues unchecked. In Turkey, President Recep Tayyip Erdogan’s repeated meddling in the operations of the country’s central bank has been a significant factor in the lira’s collapse, forcing many investors and citizens to turn to Bitcoin and stablecoins as a store of value.

Trump’s Growing Tension With the Fed

For years, President Trump has been at odds with the Federal Reserve, frequently criticizing Chairman Jerome Powell for not cutting interest rates quickly enough. Recently, Trump has ramped up his attacks on Powell, even suggesting that the Fed chair is a “major loser” and urging him to lower interest rates immediately, claiming that inflation is nonexistent and that the economy could suffer without such action.

However, Powell’s cautious approach, guided by concerns about long-term inflation risks, has not aligned with Trump’s demands for quick rate cuts. This growing tension between the President and the Fed has raised concerns among investors, with many fearing that further interference could undermine the Fed’s independence and fuel more market instability.

The Collapse of Turkey’s Currency as a Cautionary Tale

The Turkish lira’s steep decline began in 2019 when President Erdogan started to interfere with the central bank’s decision-making process. The Turkish government’s refusal to raise interest rates, despite the country’s soaring inflation, led to a dramatic loss of confidence in the lira. By 2025, the lira had depreciated by over 80%, falling from 5.3 TRY to 38 TRY per U.S. dollar.

This crisis prompted a shift in capital flows, with many Turkish citizens and businesses turning to Bitcoin and stablecoins to protect their wealth. The lira’s collapse serves as a cautionary tale for the U.S., illustrating the dangers of tampering with central bank policies during times of economic stress.

The U.S. Dollar’s Potential Decline and Global Consequences

While the U.S. dollar’s situation may not mirror Turkey’s lira collapse, the ongoing political pressure on the Federal Reserve could weaken investor confidence in the dollar. The DXY index, which measures the strength of the dollar, has already seen a 10% drop over the past three months, raising concerns about a potential devaluation of the greenback.

The dollar’s decline could have widespread implications, given its role as the world’s primary reserve currency. Global investors holding U.S. assets, especially in countries with large trade surpluses like China and Japan, could begin to rethink their investments if they lose faith in the stability of the U.S. financial system.

Bitcoin’s Appeal as a Safe-Haven Asset

In light of these uncertainties, investors may increasingly turn to Bitcoin as an alternative to the faltering U.S. dollar. Bitcoin’s decentralized nature and resistance to inflationary pressures make it an attractive hedge against the risks associated with fiat currencies.

If the U.S. dollar continues to weaken, or if Trump’s efforts to undermine the Federal Reserve succeed, Bitcoin could emerge as a safer store of value, similar to how it has become a popular asset for Turks seeking refuge from the collapsing lira.

Turkey’s experience demonstrates that when a fiat currency loses its value due to government intervention, decentralized assets like Bitcoin can provide a viable alternative. As global confidence in traditional currencies continues to erode, Bitcoin may increasingly be viewed as a safe-haven asset for those seeking to protect their wealth from economic instability.