Bitcoin Rises Above $80,000 to Hit Three-Month High Amid Soft U.S. Dollar

Bitcoin surged to a more than three-month high, surpassing $80,000 on Tuesday, as the U.S. dollar softened and crypto sector momentum picked up. The cryptocurrency market rallied after U.S. Treasury Secretary Scott Bessent took strategic actions to ease concerns in the bond market. Bitcoin reached a peak of $81,237.94 during Asian hours before ending at $80,323.24, marking its highest level since mid-May.

The leading cryptocurrency gained 16% since President Donald Trump urged Congress last week to pass legislation offering clearer definitions for the expanding digital asset sector. Bitcoin also rose 28% in August, setting it up for its largest monthly gain since November 2024. The cryptocurrency received an extra push after the U.S. Treasury announced plans last week to repurchase longer-dated bonds, aiming to control long-end yields and leaving the U.S. dollar to bear the brunt of market anxiety.

Senior researcher Tim Sun from HashKey Group explained that Bessent's statements reinforce the belief that U.S. policymakers are more tolerant of rising long-end yields before the midterm elections, creating a favorable environment for alternative assets like bitcoin and gold, which also hit a three-month high. Global head of digital assets research at Standard Chartered, Geoff Kendrick, stated that the Treasury's intervention is precisely the kind of measure that bitcoin was designed to help investors avoid, leading to increased talks about the "debasement trade," where efforts to manage bond yields shift financial pressure onto the currency market.

Analyst Tony Sycamore of IG noted that the Treasury's buyback announcement prompted investors to rush into both physical and digital assets as concerns about currency debasement resurfaced. He added that a sustained break above the current resistance levels could open the door for bitcoin to move towards $95,000 to $100,000.