Bitcoin's price has climbed to $80,000 for the first time since mid-May, as a wave of optimism swept through the previously sluggish cryptocurrency market. This renewed sentiment, fueled by a confluence of positive signals, forced a significant unwinding of leveraged bearish bets. During Tuesday's Asian trading session, the digital asset rose as much as 2.5% to reach $80,908, its highest level since May 15. This latest gain follows a substantial 23% rally in the preceding week, marking the largest weekly advance in nearly three years.
Despite this recent surge, Bitcoin's value remains significantly below its peak of approximately $126,000, which was recorded last October. The renewed interest in Bitcoin can be attributed to a fresh wave of dollar selling, triggered by U.S. Treasury Secretary Scott Bessent's announcement last week that the government would intensify its bond buyback efforts to lower long-term yields. This move has sparked discussions around the "debasement trade," a strategy that benefits from currency depreciation. Critics argue that this plan serves as further evidence that the Trump administration is not yet prepared to tackle the challenging task of reducing the budget deficit. Bitcoin was originally created as a hedge against the devaluation of fiat currencies and inflation, which are often exacerbated by central bank money creation.
Lacie Zhang, a research analyst at Bitget Wallet, commented on the shift in market dynamics. "After the Treasury expanded its long-term bond buyback program, the macroeconomic environment has become more favorable. This helps to weaken the dollar and revitalize the 'debasement trade' between Bitcoin and gold," she said.
Last week's price surge also corresponded with the strongest weekly inflows into spot Bitcoin exchange-traded funds (ETFs) in ten months. Data indicates that 13 U.S.-listed ETFs saw net inflows of $1.92 billion, the highest figure since early October of last year. These funds also recorded their best single-day inflow in over three months on August 20, with a substantial $606.3 million added.
The cryptocurrency market received an additional boost on the day of Bessent's announcement when President Trump met with industry leaders. This meeting rekindled confidence in the U.S. government's supportive stance on cryptocurrencies, following a period of stalled legislative progress. The momentum had slowed after the Clarity Act, designed to establish a market structure, failed to reach a vote in the Senate before its August recess. Trump has since urged the Senate to pass the bill, which is expected to be reconsidered in mid-September.
The sharp price increase caught many traders off guard. According to data from Coinglass, leveraged short positions across all crypto assets were liquidated last week, totaling approximately $7.2 billion. For months, cryptocurrency traders had been searching for a market bottom, as Bitcoin spent much of 2026 in decline following the sell-off that began after its all-time high last October. Nevertheless, doubts persist within the market. Analysts point out that the recent price surge has been primarily driven by a short squeeze, which suggests that the underlying demand may not be sustainable in the long term.