Bitcoin Hits $80,000 for First Time in Three Months as Debasement Trade Returns
By Aboki Forex —
Bitcoin rode the debasement trade to a three-month high above $80,000 on Tuesday, as renewed dollar weakness and strong ETF inflows revived appetite for the cryptocurrency. The token climbed 23% in the seven days through Sunday, the biggest weekly jump in about three years.
Rally driven by US Treasury move
Bitcoin climbed as much as 2.5% to $80,908 on Tuesday in Asia, a level last seen on May 15. It remains well below its peak of about $126,000 reached in October.
The move followed US Treasury Secretary Scott Bessent's announcement last week that the US will step up its bond repurchases in a bid to bring long-term yields lower. That sparked a new round of dollar selling and renewed chatter about the debasement trade. Skeptics saw the plan as further evidence the Trump administration is not ready to do the hard work of reducing the budget deficit.
Bitcoin was originally created as a way to escape fiat currency debasement and inflation driven by central bank money creation.
ETF inflows and Washington support
"The macro backdrop turned more supportive after the Treasury's expanded long-dated buyback plan helped weaken the dollar and revive the 'debasement trade' across Bitcoin and gold," said Lacie Zhang, a research analyst at Bitget Wallet.
Spot Bitcoin exchange-traded funds had their strongest weekly inflow in 10 months last week. The 13 US-listed funds drew in a net $1.92 billion, the most since early October last year. They also posted their biggest single day of inflows in over three months, pulling in $606.3 million on Aug. 20.
The crypto market got an added boost the day of Bessent's announcement with a meeting between President Donald Trump and industry leaders. The meeting revived optimism around the administration's commitment to crypto. Legislative momentum had slowed after the Clarity Act, a market structure bill, failed to make it to a vote before the Senate's August recess. Trump urged the chamber to pass the bill, and it is expected to be taken up again in mid-September.
Leveraged bets wiped out
The surge caught many traders off guard. About $7.2 billion in leveraged bearish bets across all cryptoassets were liquidated last week, according to Coinglass data.