Expanded U.S. Treasury bond buybacks weakened the dollar and revived the “debasement trade,” while President Donald Trump’s push for the CLARITY Act added further fuel to the rally.
- Bitcoin rose more than 25% over the past week, crossing $80,000 for the first time in more than three months.
- Ethereum jumped 32% over the past week, while MSTR and COIN gained 31% and 20% respectively in the period.
- Retail sentiment for BTC, MSTR and COIN was ‘extremely bullish.’
The price of Bitcoin, the world’s most valuable cryptocurrency by market capitalization, rose past $80,000 for the first time in over three months on Tuesday.
Bitcoin (BTC) was at $80,836.00 around 2:30 am IST. BTC was the top trending ticker on Stocktwits at the time of writing, with retail sentiment for the cryptocurrency climbing over the past week to ‘extremely bullish.’ Ethereum (ETH) was up nearly 1.8%, above the $2,500 level.
The surge comes amid a mix of macroeconomic and policy developments, including renewed U.S.-Iran tensions, the Treasury’s decision to expand bond buybacks and President Donald Trump’s continued push for crypto-friendly regulation.
Bitcoin emerged as a key beneficiary of the U.S. Treasury’s move to support the long end of the bond market. The decision to double long-dated bond buybacks pushed Treasury yields lower and weakened the dollar, prompting investors to rotate into alternative stores of value such as Bitcoin and gold, which have been the worst-performing major assets this year. Bitcoin surged more than 25% in the past week, with the rally also amplified by a short squeeze.
The 30-year Treasury yield rose to its highest level since 2007 amid concerns about the war in Iran and the U.S. national debt hitting $40 trillion, which in turn prompted a fresh round of dollar selling and boosted crypto and gold.
Ethereum, Bitcoin-Linked Stocks Rally
Ethereum rose 32% in the past week, while Tether (USDT) was flat in this period. Bitcoin-linked stocks Strategy (MSTR) and Coinbase (COIN) were up 3% each in overnight trading ahead of Tuesday, following sharp gains in the past week.
“$BTC Mid 80s is where the next barrel of rocket fuel is sitting. Break it, and we go for 100k almost 100% sure of it,” a trader wrote on Stocktwits. The retail sentiment is ‘extremely bullish for MSTR and COIN as well.
Trading in MSTR was influenced by the company’s Monday announcement of the creation of a new $1.59 billion “USD Cash” pool to make investments. The fund, which is separate from the $5 billion “USD Reserve,” gives the firm additional flexibility to “respond more quickly to market conditions, including dislocations in the markets for bitcoin or Strategy’s securities,” it said.
“$COIN Shorts took the momentum today but BTC really could save the day,” a trader wrote on Coinbase’s steam. “If this cracks 80k shorts will lose the fight it is inevitable. Last time BTC was 82k this was 220 per share. Seeing the earnings chopped about 10% off. This will hit around $198-200 if BTC cracks 80k.”
Trump’s New Crypto Bump
In a blog post on Friday, hedge fund billionaire Ray Dalio warned of a looming debt crisis and said investors should be “underweighting debt assets like bonds, and overweighting gold and a bit of Bitcoin.”
Meanwhile, Trump hosted several crypto executives at the White House last week, giving another boost to the crypto surge. At the event, Trump called on Congress to pass the long-stalled CLARITY Act, backed by the crypto industry, which would establish legal guidelines for digital assets.
The president said: “We need Congress to take the next step by passing the CLARITY Act, a fair version of the CLARITY Act…It’s a very, very powerful structured legislation which will keep us ahead of China, keep us ahead of everyone else.”
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