Bitcoin tops US$80,000 for first time since May as US moves boost crypto

Bitcoin has surged past the US$80,000 mark for the first time since May, following the US government's initiatives to stabilize US bond yields. The leading cryptocurrency surged approximately 25% over the past week, indicating a potential early recovery from an ongoing market downturn. Despite currently sitting nearly 36% below its record high of US$126,000 reached in October, this significant price increase has sparked optimism among market analysts.

Allen Ding, director of Bitfire Research, anticipates this surge as the beginning of a new bull market in the cryptocurrency sector. The recent price rise was triggered by a series of supportive policy measures from the US government, including plans to increase the purchase of long-term U.S. debt securities to lower bond yields and stimulate economic growth, making hard assets like cryptocurrency more appealing to investors seeking to hedge against the US dollar.

Concurrently, gold also reached a three-month high of US$4,698 per ounce, continuing its 5.1% weekly gain. This price surge for Bitcoin is marked by characteristics commonly associated with an early bull market, according to Ding. However, despite this robust recovery, Ding cautions that this price surge might not yet signify a definitive upward trend, as much of the price movement has been attributed to liquidations of overexposed short positions, rather than sustained buying in the spot market.