Bitcoin Jumps Above $80,000 as ‘Debasement Trade’ Pressures Dollar

Bitcoin (COIN:BTCUSD) surged to its highest level in more than three months on Tuesday, as concerns over the health of U.S. public finances weighed on the dollar and encouraged investors to increase exposure to cryptocurrencies.

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

The latest advance puts Bitcoin on course to record gains in eight of the past nine sessions following a sharp rebound over the previous week. Short-covering has provided additional momentum, with the rally forcing traders holding bearish positions to exit the market.

U.S. Treasury Bond Buybacks Fuel 'Debasement Trade'

Much of Bitcoin's latest strength has been linked to increasing concerns about U.S. fiscal policy and the longer-term outlook for the dollar.

Those worries intensified last week after the U.S. Treasury announced plans to roughly double the pace of its bond buybacks in an effort to contain the recent rise in yields.

The announcement prompted speculation that the dollar could come under pressure as the Treasury intervenes more actively in bond markets, encouraging what investors have described as the "debasement trade."