US Dollar Hits Lowest Reserve Share in Decades—What It Means for Markets

The dollar's dominance in global reserves just hit a historic low. We're talking decades-level shifts here.

Foreign central banks are slowly rotating out of greenbacks. Their dollar holdings have compressed to levels unseen since the early 1990s. That's a massive structural shift playing out quietly in the background.

Why does this matter? A few reasons:

**The erosion narrative**: Every time the Fed raises rates, emerging markets feel the squeeze. Every time US inflation stays stubborn, reserve managers start asking uncomfortable questions. "Do we really need this much dollar exposure?" Classic central bank math.

**What's replacing it?**: A mix of everything—Euro allocations are holding steady, yen getting some love, and yeah, alternative assets are creeping into the conversation. Not massive yet, but the psychological shift is real.

**Crypto implications**: When reserve currency dynamics shift, liquidity rotates. Some of that dry powder eventually flows into alternative value stores. Not saying tomorrow, but the trend is there.

Bottom line: The dollar's seat at the table is getting smaller. That's the story to watch, whether you're tracking macro trends or trying to understand which way capital might flow.