The US dollar’s global reserve share dropped to 56.32% in Q2 2025, with 92% of the decline due to exchange-rate effects, not central bank portfolio changes. Despite currency swings, central banks mostly maintained their USD holdings.

IMF’s COFER report reveals central banks kept dollar allocations steady despite significant currency fluctuations. Major currency movements in Q2 2025 gave the impression of large portfolio reallocations.

The DXY index saw a more than 10% decline in the first half of 2025, its largest drop since 1973. The US dollar fell 7.9% against the euro and 9.6% against the Swiss franc in Q2, leading to a drop in its reserve share.

Adjusted for constant exchange rates, the US dollar’s reserve share only slightly decreased to 57.67%, indicating minimal changes by central banks. Stories of global dedollarization may be overstated based on this data.

The COFER data challenges narratives of dedollarization as central banks did not diversify away from the dollar despite its depreciation. This has implications for Bitcoin and other digital assets marketed as hedges against USD weakness.

The British pound’s reserve share appeared to increase in Q2, but it was driven by valuation effects masking a real decrease in holdings. Investors should look beyond surface numbers to understand liquidity shifts.

The IMF’s study offers a more accurate view of monetary policy amid market volatility. Central banks maintained stable dollar holdings in Q2, highlighting the importance of exchange-rate adjustments in assessing reserve shifts.

Central banks prioritize liquidity, returns, and risk in managing reserves, explaining the continued reliance on traditional currencies. The deep markets and established systems of the dollar pose challenges for digital assets.

The IMF’s methodology shows how currency changes can distort reserve data, with most shifts in major currencies in Q2 resulting from valuation swings, not actual portfolio adjustments. Central banks remained cautious during market turbulence.

Investors interested in dedollarization as a Bitcoin catalyst should focus on exchange-rate-adjusted numbers. The COFER data provides crucial insights into global macroeconomic trends shaping the crypto market.

Read more at Yahoo Finance: IMF Q2 2025 COFER Data Weakens Dedollarization Narratives Cited as Bullish Catalysts for Bitcoin