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

Bitcoin surged past $80,000 on Tuesday, reaching a three-month high as a weaker U.S. dollar and Treasury Secretary Scott Bessent's efforts to stabilize the bond market boosted cryptocurrency momentum. U.S. President Donald Trump had previously urged Congress to pass legislation that would provide clearer definitions for the expanding cryptocurrency sector.

Since then, Bitcoin has climbed 16%, reaching a peak of $80,323.24 earlier in Asian trading hours before settling at its current level. The digital asset has gained 28% this August, marking its largest monthly increase since November 2024. Cryptocurrencies benefited from a U.S. Treasury plan to repurchase longer-duration bonds, which helped curb long-end yields and placed the U.S. dollar under investor scrutiny.

Senior researcher Tim Sun from HashKey Group stated that Bessent's statements have reinforced the belief that U.S. policymakers may be less tolerant of further long-end yield increases through the midterm elections, creating a more favorable macro environment for assets like Bitcoin and gold. Gold also rose to a three-month peak amid the dollar weakness.

Treasury's announcement was deemed "exactly the type of thing Bitcoin loves," according to Geoff Kendrick, global head of digital assets research at Standard Chartered. The move fueled speculation about the "debasement trade," which involves shifting pressure from the bond market to the currency market as attempts to prevent long-end yields from reaching market-clearing levels through buybacks unfold.

Analyst Tony Sycamore from IG noted that the sustained break above the current level could pave the way for a potential move to the $95,000–$100,000 range.