Bitcoin has climbed above USD 80,000 and reached USD 80,908 in the Asian trading session. The price is therefore back at its mid-May level, up 23% on the week.
This move has revived debate about the so-called debasement trade. The term describes positions in Bitcoin and gold as a hedge against the devaluation of fiat money. Expansive monetary policy and rising government debt drive that devaluation. The latest push started with a decision by the US Treasury. Secretary Scott Bessent announced the plan on 19 August. His department will at least double its buyback program for long-dated government bonds. A day later, he signaled further increases. At the same time, President Donald Trump met representatives of the crypto industry. Meanwhile, the 13 spot Bitcoin ETFs listed in the US took in USD 1.92 billion last week. Those are the highest net inflows in roughly ten months.
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Bessent's bond buybacks fuel the Bitcoin rally
The US Treasury regularly buys back its own government bonds on the secondary market. Such a buyback takes outstanding paper out of circulation and hands the seller cash instead. The operations aim to improve the tradability of older bonds and to dampen yield spikes. Bessent lifted the volume from USD 2 billion to at least USD 4 billion per operation. The focus lies on 10-, 20- and 30-year paper, so at the long end of the yield curve. A day later, the secretary held out the prospect of a further expansion.
"We do buybacks routinely, and we are going to increase the size of the buyback ... that could be more than USD 4 billion per issue." - Scott Bessent, US Treasury Secretary
For macro investors, the direction of the signal matters more than the absolute sum. Critics read the program as an admission. In their reading, the government is not actively cutting the structural budget deficit. Instead, it props up liquidity at the long end of the curve. That puts the dollar under additional pressure. Bitcoin originally emerged as a way out of this exact dynamic, because its supply is capped.
Therefore, investors answer signals of fiscal expansion with purchases of Bitcoin and gold. Yet the yield on 30-year US Treasuries most recently stood at its highest level since 2007. Rising long-term yields make government refinancing more expensive and raise the pressure on the department. Overall, that points to a tighter monetary environment. Trump's meeting with crypto industry representatives added further tailwind. It revived expectations of regulatory accommodation.
ETF inflows and a short squeeze drive Bitcoin past USD 80,000
The 13 US-listed spot Bitcoin ETFs recorded net inflows of USD 1.92 billion last week. A stronger weekly figure dates back roughly ten months, when Bitcoin traded near its record. On 20 August, USD 606.3 million flowed in on a single trading day. Before that, more than three months had passed without a higher daily figure. The products count as the most important access channel for institutional investors who do not want to handle custody themselves. Their inflows therefore serve as a gauge of demand beyond speculative trading.
A wave of forced liquidations amplified the move. Leveraged short positions bet on falling prices and post collateral for that bet. If the price rises, exchanges demand more margin or close the position automatically. In total, roughly USD 7.2 billion in short bets unwound within a week across all crypto assets. The forced buying pushed the price further up. Consequently, the weekly advance of more than USD 16,000 produced one of the largest green candles in Bitcoin's history.
Other cryptocurrencies gained even more over the same period. Ether rose 32%, Solana 34% and XRP 53%. Furthermore, the lead of the large altcoins shows how broad the recovery turned out. Similarly, the Crypto Fear & Greed Index last stood at 83 points and marks a sharp swing in sentiment. The barometer maps market sentiment on a scale from 0 to 100. That value sits in the range of extreme greed.
Bitcoin remains far below its October 2025 all-time high
However, the gap to the record remains substantial. Bitcoin marked its all-time high at around USD 126,000 on 6 October 2025. Shortly afterwards, a wave of selling set in. It held the price in a downtrend through much of 2026. The current level thus sits around USD 45,000 below the record, a gap of a good third.
By contrast, the recent path shows a rapid sequence of new multi-month highs. The seven days to 23 August delivered a gain of 23%. Bitcoin had last posted a stronger weekly gain about three years ago. Early in the week, the price touched USD 81,000 before settling back above the USD 80,000 mark. The last trading day at that level had been 15 May.
