Bitcoin jumps 3%, closing in on $80,000 as rally gathers pace

Bitcoin closed in on the $80,000 mark on Tuesday, as renewed inflows into spot bitcoin ETFs and improving risk appetite extended the cryptocurrency's recent rally.

The flagship cryptocurrency jumped 3.1% to $79,739.

The latest move extends a sharp rally that began last week, when bitcoin surged more than 20% in three days, its biggest three-day gain since 2023. The rally was fueled partly by a short squeeze, with more than $4 billion in bearish crypto positions liquidated as prices rose.

The gains followed the U.S. Treasury's announcement that it would double its purchases of longer-dated government bonds. The move briefly pushed yields lower and revived demand for risk assets, while growing concern over inflation and government debt also boosted interest in assets perceived as scarce.

Institutional demand has also returned. U.S. spot bitcoin exchange-traded funds attracted $1.92 billion in net inflows last week, their largest weekly haul since October, when bitcoin reached its previous cycle peak.

Still, questions remain over whether the breakout can last. Bitcoin has been in a prolonged slump since October, and BTIG noted that a similar surge in January 2023 initially faded before the cryptocurrency found support around its 200-day moving average.