Bitcoin Breaks $80,000 as U.S. Fiscal Concerns Fuel Dollar Weakness

Bitcoin (COIN:BTCUSD) climbed above $80,000 on Tuesday, reaching its highest level in more than three months as mounting concerns over U.S. fiscal policy put pressure on the dollar and encouraged investors to move into cryptocurrencies and other alternative assets.

The world's largest cryptocurrency rose 4.7% to $80,760.8 by 01:57 ET (05:57 GMT), after briefly reaching $81,220.4, its strongest level in three months.

The advance leaves Bitcoin on course to rise in eight of the past nine sessions, extending a sharp recovery over the previous week. The move has also been amplified by short-covering as higher prices forced traders betting against Bitcoin to close their positions.

Treasury Buyback Plans Drive 'Debasement Trade'

The latest cryptocurrency rally has been closely linked to renewed concerns about the U.S. fiscal position and the potential longer-term implications for the dollar.

Sentiment shifted last week when the U.S. Treasury announced plans to roughly double the pace of its bond buybacks as part of efforts to contain the recent surge in yields.

The move raised concerns that greater Treasury intervention in debt markets could ultimately weigh on the dollar, encouraging investors to pursue the so-called "debasement trade."