Fed Governor Waller just reignited the bitcoin debasement trade: Chart of the Day

Bitcoin is back at the Rubicon. Fed governor Christopher Waller just gave the bulls another reason to cross it.

Bitcoin (BTC-USD) surged over 5% Thursday to roughly $81,000, putting it back within striking distance of the resistance that has capped it since February.

The latest charge began around 8:30 a.m. ET, when Waller opened the door to leaving interest rates unchanged at this month's meeting if inflation continues to cool.

Index futures and Treasurys climbed around the same time, while yields and the dollar fell. The odds of a September rate hike dropped to roughly 52% from 63% a day earlier, according to fed funds futures. The dollar posted its biggest drop since Aug. 19.

Sound familiar?

That was the day the bitcoin debasement trade took off after Treasury Secretary Scott Bessent doubled planned buybacks of some longer-dated Treasurys. Bitcoin, gold, and bonds surged as the dollar fell that day as well.

This time, Waller provided the spark.

Recent inflation data finally shows "some signs of disinflation," Waller said. If the improvement continues, he said he would support holding rates steady. A hot August inflation report could still put a hike back on the table.

In case the message wasn't clear enough, Waller loosened up during the Q&A.