Bitcoin rises above $80,000 as soft dollar, debasement fears boost momentum

It was last at $80,323.24 in Asian hours, having earlier touched $81,237.94, its highest level since mid-May. Bitcoin is up 28pc so far in August, set for its biggest monthly gain since November 2024.

Cryptocurrencies also got a big boost after the US Treasury last week unveiled plans to buy back more long-dated bonds to help cap the gains in the long-end yields, a move that has led to the US dollar bearing the brunt of investor angst. Tim Sun, senior researcher at Hash.

Key Group, said Bessent’s messaging has reinforced the market’s view that, at least through the midterm elections, US policymakers may have a lower tolerance for a further rise in long-end yields. “That would create a relatively supportive macro backdrop for assets such as bitcoin and gold,” Sun said.

Gold has been the other beneficiary of the dollar weakness, rising to a three-month high. The Treasury announcement is “exactly the type of thing bitcoin loves”, Geoff Kendrick, global head of digital assets research at Standard Chartered, said in a note last week, adding that bitcoin was built to allow investors a way to avoid this type of intervention.

The action stoked increased chatter around the so-called debasement trade, where the moves to prevent long-end yields from reaching market-clearing levels via buybacks lead the pressure to shift from the bond market to the currency market.

“This (Treasury announcement) prompted buyers to scramble into physical and digital assets as debasement trade fears re-emerged,” said Tony Sycamore, market analyst at IG.“A sustained break above here would open the door for a move towards $95,000 and $100,000.”