Bank of America analyst Michael Hartnett argues that the weakening of the dollar is not merely a temporary adjustment, but rather a warning sign of the beginning of the end of U.S. dominance. The U.S. share of global stock markets has risen from 40% during the 2008 crisis to 67% today. At the start of 2024, most investors continued to bet on the sustained dominance of U.S. assets, while largely ignoring risks such as recession, prolonged bear markets, and escalating trade wars.
However, things are now shifting. Since the beginning of the year, we’ve seen growing interest in alternative paths, such as China's AI giant DeepSeek and emerging markets. All of this is part of a broader trend of global “capital liberation,” which could mark the start of a long-term decline in the dollar’s value and raise questions about the U.S.'s leadership in the global economy.
The historical cycle of reserve currencies supports this hypothesis. Over the past 500 years, monetary hegemony has shifted approximately every 80 to 100 years — from the Spanish real to the Dutch guilder, then to the British pound, and finally to the U.S. dollar. Current geopolitical and economic shifts suggest that the dollar’s era as the unrivaled global currency may be approaching its end. BTCUSDSPXGBPUSDEURUSD