On January 27, HSBC told investors to remain aggressively risk-on. The bank recommends overvaluing equities, high-yield bonds, emerging market debt, and gold, while undervaluing sovereigns, investment-grade credit, and oil.
This decision is based on a specific macro view: U.S. growth will be sustained, interest rate fluctuations will be contained, and the market will lean toward big-cap tech. Meanwhile, the US dollar hit its lowest since 2021, trading at 96.206 at the time of writing.
This confluence raises questions about whether the dollar’s multi-year lows can create risk appetite for Bitcoin.
HSBC’s argument is not just about currency calls. This is important because this is the administration’s call for volatility and growth, and Bitcoin trades as a high-beta risk asset in some environments and as a liquidity or currency hedge in others.
You need to test which behavior works with your current setup.
Who else is positioned at risk?
HSBC is not alone. JPMorgan’s Q1 2026 allocation represents a “pro-risk slant,” with an overweight in U.S., Japanese, and some emerging market stocks, an explicit underweight in the dollar, and a constructive view on gold.
Invesco’s first-quarter house view maintains a moderate overweight in equities over bonds, favors riskier credit exposure, and cautions that it is also underweight in the dollar position.
BlackRock’s recent biweekly market commentary continues to support risk assets at a structural level.
This pattern has been consistent, with large allocators taking risk-friendly positions while reducing dollar exposure.
This combination theoretically supports an asset that is perceived as both a risk alternative and a dollar alternative, with Bitcoin fitting into both categories at different times. The question now is which lenses apply.
| institution | too fat | low weight | Driver listed | Impact on BTC |
|---|---|---|---|---|
| HSBC | stocks; high-yield credit; Emerging Debt. gold | sovereign debt. Investment grade credit. oil | What drives the market is US interest rate + growth rate (Not geopolitics). Content raterotate towards ; mega cap tech | BTC tends to behave as follows. risk beta If vol is still included |
| JP Morgan | Stocks (US, Japan, some emerging countries). (constructive) gold | USD | “proris tilt” Stock market leadership, Fed rate cuts/macro backdrop seen as supportive, gold as diversifier | Supports BTC Via Risk On Channel More than just a USD hedge channel |
| i invest | Comparison of stocks and bonds. Credit risk (riskier credit exposure) | USD | Capital OW vs. FI is moderate. prefer credit risk;flag your usd | If the government stays in power, there is a high possibility that BTC will rise. risk on (Equity/credit friendly) |
| black rock | Risk assets/US stocks (structured risk on frame) | Long-term government bonds (in most cases) are not preferred over stocks. spend money tactically | Pro-risk stance (policy/interest rate background) related to the macro regime. Gold as a tactical diversifier/hedge | BTC tends to track Equity/Liquidity If risk appetite is supported and volumes remain low |
There are two faces to the weak dollar.
A dollar decline can occur in two different macro regimes that have opposing effects on high-beta assets.
In a risk-on regime of accelerating global growth, a functioning carry trade, and easing financial conditions, a weaker dollar supports high-beta assets as capital flows towards growth and yield.
In a risk-off regime characterized by U.S. growth concerns, policy uncertainty, and rising volatility, a weaker dollar may reflect a shift in capital away from U.S. assets even as risk appetite collapses.
In the second case, a decline in the dollar and a decline in risky assets move in tandem.
HSBC’s call is premised on the first regime: reduced volatility and stable growth. If this assumption holds true, Bitcoin should benefit from both a weaker dollar and a broader risk-on stance.
If volatility accelerates or growth disappoints, a weak dollar could become irrelevant or even send a negative signal. This distinction is important because Bitcoin’s sensitivity to each factor changes over time.
Testing Bitcoin’s dollar and risk-on sensitivity
A disciplined way to assess whether dollar depreciation matters for Bitcoin is to measure the proxy correlation between Bitcoin’s daily returns and the dollar index over the past 60-90 days.
A significant negative correlation, equivalent to less than -0.3, indicates that the weaker dollar is providing a mechanical tailwind. On the other hand, if the correlation is close to zero or positive, the “weak dollar, strong bitcoin” relationship does not work, and the dollar level becomes noise.
At the time of writing, the 60-day rolling correlation between Bitcoin and DXY was -0.036. Meanwhile, the 90-day rolling correlation was +0.004. In this scenario, the dollar movement does not imply any upside, but is just chatter.
However, historical periods have shown this correlation to be highly variable. In liquidity-driven rallies, Bitcoin often exhibits a strong negative correlation with the dollar as it reacts to global liquidity conditions.
In risk-off episodes, relationships can be reversed or completely broken down. The current correlation will determine whether the dollar’s four-year low acts as a tailwind or a tailwind.
The second test combines Bitcoin returns with a clean risk proxy consisting of the S&P 500 and Nasdaq on the same rolling window.
The 60-day rolling correlation between Bitcoin and the S&P 500 is +0.536 at the time of writing, but increases to +0.591 over 90 days. For Nasdaq, the 60-day and 90-day correlations were recorded at +0.544 and +0.586, respectively.
Bitcoin’s stronger correlation to stocks than the dollar suggests that HSBC’s “risk-on with less volatility” thesis will be a key driver.
This distinction is important because HSBC’s calls are conditional. The bank’s risk-on stance assumes interest rate fluctuations are kept low and growth is sustained.
However, if either assumption breaks down due to an event such as a spike in interest rate volatility or disappointing growth data, the judgment of the entire system will be reversed.
If that happens, Bitcoin could face headwinds from increased volatility even if the dollar continues to fall.
What the microstructured layers and dollars indicate
Bitcoin’s internal market structure as of January 27 shows mixed signals that complicate the macro tailwind story.
Farside Investors data showed spot ETF flows were a net negative $110.3 million for the month, indicating cooling institutional demand despite broad risk-on settings.
Funding rates are near neutral, with an OI weighting of 0.0068% and a volume weighting of 0.0061%, suggesting that leverage is not stretched too long and is not positioned defensively.
CoinGlass shows options open interest at $36.49 billion, reflecting active derivatives positioning, but with no clear directional bias from funding data alone.
The most constructive signals from microstructure come from exchange balances. 2.47 million BTC remains on exchanges, which is close to the lowest level in the past year.
A decline in foreign exchange reserves typically indicates less selling pressure as holders move their coins into cold storage, an action associated with longer time horizons and less urgency for liquidation.
Combined with neutral funding, this suggests the positioning is not overextended and means there is room for macro tailwinds to turn to the upside without triggering immediate supply constraints from unwinding overleveraged longs.
Spot ETF outflows are causing tension. Despite Wall Street’s risk-on attitude, institutional investors are not actively adding to their exposure. This could mean that Bitcoin is not yet considered a core beneficiary of the regime, or that flows are lagging behind the story.
In any case, the microstructure does not exhibit defensive positioning that would prevent macrotransmission, but it also does not exhibit aggressive positioning that would amplify it.
| metric | Latest (January 27th) | signal | why is it important |
|---|---|---|---|
| Spot ETF Flow (MTD) | -$110.3 million | Headwind | Net outflows suggest institutional investors’ bidding has cooled despite the risk-on tone |
| Perps funding (OI weighted) | +0.0068% | neutral | Almost neutral leverage. No crowded and long postures to relax |
| Perps funding (volume weighted) | +0.0061% | neutral | Confirm funding neutrality across large venues |
| option open interest | $36.49 billion | neutral | High position, but direction is unclear without skew/IV context |
| exchange balance | 2.47 million BTC | cooperative | Lower exchange supply means less short-term selling pressure |
The regime Bitcoin is actually facing
The drop in the dollar to levels last seen in 2021 is occurring in a hybrid regime, rather than the clean risk-on environment HSBC envisions.
Financial conditions are easing, which is the most obvious tailwind for high-beta assets. Volatility remains subdued in both equity and bond markets, supporting risk appetite. But instead of reaccelerating, global economic growth is expanding at its slowest pace in six months.
US growth has strong GDP estimates, offset by deteriorating consumer confidence and weak employment growth. Policy uncertainty remains high and volatile, adding a layer of friction that can disrupt even favorable financial conditions.
This puts Bitcoin in a complicated position. The dollar is depreciating in an accommodative financial environment with subdued volatility, both of which support Bitcoin as a high-beta risk asset.
However, the absence of growth acceleration and the presence of policy uncertainty mean that the macro environment is more fragile than the HSBC framework suggests.
Bitcoin has benefited from easy financial conditions and low volatility, but faces headwinds from mixed growth signals and policy noise that could trigger a sudden change of government.
As long as volatility remains contained and financial conditions remain easy, trading will work. These two conditions are currently met, but are not guaranteed. Especially as policy uncertainty increases and both can quickly become disrupted.
(Tag translation) Bitcoin
