Bitcoin Crosses $80,000 Following Debasement Trade Resurgence and US Treasury Buyback Plan

NEW DELHI — Bitcoin surpassed $80,000 for the first time since mid-May, marking a significant recovery in the cryptocurrency market following a months-long decline. The original cryptocurrency rose up to 2.9 percent to $81,257 during Tuesday trading in Asia.

The recent increase follows a 23 percent rally over the seven days leading up to Sunday, representing the largest weekly jump for the digital asset in approximately three years. Despite the upward movement, the token remains well below its all-time high of about $126,000 reached in October.

Market participants attribute the renewed interest in Bitcoin to chatter surrounding the debasement trade. This was sparked by US Treasury Secretary Scott Bessent’s announcement that the US will increase its bond repurchases to lower long-term yields, which subsequently led to dollar selling. Bitcoin was originally created as an alternative to fiat currency debasement and inflation resulting from central bank money creation.

According to Lacie Zhang, a research analyst at Bitget Wallet, the macroeconomic backdrop turned more supportive after the Treasury’s expanded long-dated buyback plan helped weaken the dollar and revive the debasement trade across both Bitcoin and gold.

Institutional interest also rebounded, with spot Bitcoin exchange-traded funds recording their strongest weekly inflow in 10 months. The 13 US-listed funds drew in a net $1.92 billion last week, the highest total since early October of the previous year, according to Bloomberg data. Additionally, these funds posted a single-day inflow of $606.3 million on August 20.

Further supporting market sentiment was a meeting between President Donald Trump and crypto industry leaders on the day of Bessent’s announcement, which renewed optimism regarding the administration's commitment to the sector. Legislative momentum had previously slowed following the delay of the Clarity Act, a market structure bill that failed to reach a vote before the Senate’s August recess. President Trump has urged the chamber to pass the legislation, which is expected to be reconsidered in mid-September.

The sharp price increase caught many market participants by surprise, resulting in the liquidation of about $7.2 billion in leveraged bearish bets across all cryptoassets last week, based on Coinglass data.

While crypto traders have spent months searching for a market bottom following a selloff that began last October, skepticism remains among analysts. Some experts point to the short squeeze as the primary driver behind the rising prices, raising questions regarding whether current demand levels will be sustained.

"The recent movement in the cryptocurrency market highlights how closely digital assets are tied to broader macroeconomic shifts, particularly monetary policy changes and currency valuations. While the surge past $80,000 and strong ETF inflows reflect renewed institutional interest and short-term liquidity events, businesses and investors must remain cautious. Market volatility driven by short squeezes and policy announcements requires a disciplined approach to risk management rather than speculative enthusiasm." — Dr. Shishir Gupta, Founder & CEO, StartupLanes