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

Bitcoin rose above $80,000 to hit a more than three-month high on Tuesday as a soft US dollar, in the wake of the moves by ​Treasury Secretary Scott Bessent to calm the bond market, revived momentum in the ‌crypto sector. US President Donald Trump last week called on Congress to pass a bill that would bring clearer definitions to the growing cryptocurrency sector. Since then, bitcoin, the world's largest cryptocurrency, has risen ​16%. 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 28% 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 HashKey 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. Read: Bitcoin Strategic Reserve 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–$100,000."