May 2025 recap: The Dollar drops, crypto pops

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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A weaker Dollar, A stronger Bitcoin: The macro repricing begins

May 2025 marked a sharp pivot in U.S. policy and a structural repricing in global markets. The U.S. Dollar Index (DXY) fell 8.3% year-to-date by May's end, driven by the Trump administration's aggressive economic agenda, informally dubbed the "Big Beautiful Bill." This included $3.8 trillion in deficit spending and targeted trade policy manoeuvres to weaken the dollar and boost exports. Early in May, a U.S. court ruling blocked Trump's 145% import tariffs, prompting a brief rally in equities and crypto. But by mid-month, an appeals court paused that ruling, leaving tariff uncertainty hanging over markets. On May 30, Trump escalated further, doubling steel tariffs to 50%, while Treasury Secretary Scott Bessent confirmed stalled negotiations with China, adding to the growing sense of volatility.

What's next

Gold, Bitcoin, and ETH all outperformed in May, but now technicals are breaking down. With inflation data and rate expectations in flux, June could flip the script. We’re not guessing—we’re already positioned.

Key Macro Data for May:

• Federal Reserve: Held rates steady on May 7.
• CPI: Released on May 13, came in at 2.3% (below forecasts).
• PPI: Released on May 15, confirmed easing headline inflation, but sticky core inflation.
• GDP (Q2 estimate): Released on May 30, contracted by 0.2%.
• Jobless Claims: Reported on May 22, reached 240,000 with continuing claims at multi-year highs.
• Personal Income: Released on May 31, grew by 0.8%.
• Personal Spending: Released on May 31, rose only 0.2%.

Markets reacted cautiously. Equities held near record highs, with the S&P 500 pinned close to 5900, but momentum slowed. U.S. 10Y and 30Y yields rose as deficit concerns loomed, with markets now expecting two rate cuts in the second half of 2025.

Bitcoin was the clear leader. It surged from $93K on May 1 to a peak of $111K by May 22, before consolidating below $105K on strong ETF inflows. Gold also moved higher, reinforcing the hard asset demand narrative.

The Bitcoin 2025 Conference (May 27-29) in Las Vegas added to the momentum, with Vice President JD Vance championing stablecoin legislation and a national Bitcoin reserve. Globally, Pakistan's Bitcoin reserve announcement signalled that this wasn't just a U.S. phenomenon-it was a worldwide pivot. Domestically, however, security risks took centre stage: a chilling Bitcoin kidnapping and torture case in Manhattan underscored the dark side of crypto's allure, while Coinbase's data breach rattled investor confidence. These vulnerabilities remain a persistent threat, and we'll be diving deeper into them in an upcoming security-focused piece.

Despite crypto's strength, technical breakdowns emerged by month's end. Bitcoin and SOL lost key uptrend lines, while TOTAL3 was rejected at $930B and eyes $784B as the next support. Bitcoin...