Bitcoin nears $80,000. What’s going on?

After laying dormant for the last year, your crypto cousin is probably popping off in the family group chat right now. Bitcoin ended yesterday near $80,000 after its biggest three-day rally since March 2023. It has jumped over 22% in the last seven days, following the US Treasury Department’s announcement that it would buy back more bonds.

What’s going on? Since hitting an all-time high of $126,000 last October, bitcoin has steadily fallen as investors rotated into the AI trade and enthusiasm for the cryptocurrency faded.

But then Treasury Secretary Scott Bessent attempted to boost the flailing bond market last week. That…didn’t really work—but it did help to revive bitcoin:

• The move spooked investors. Even billionaire hedge fund manager Ray Dalio urged folks to buy bitcoin and gold to hedge their investments from growing US debt.
• Some investors are calling what’s happening the “debasement trade,” or the trend of ditching currency (like the weakening dollar) and putting money in “safer” assets like gold. Bitcoin is still pretty volatile, but it’s more insulated from monetary policy.

There’s a divide on whether the bump will stick. President Trump hosted a crypto summit last week and urged Congress to pass the Clarity Act, which creates a legal framework for regulation. The bill, which the Senate could vote on next month, has mostly stalled, with some lawmakers arguing it needs stronger language to prevent politicians from profiting off their own crypto.—MM