Bitcoin advanced past $80,000 on Tuesday, reaching a three-month high of $81,220.4, as investors sought refuge from a weakening dollar amid growing fiscal concerns in the United States. The cryptocurrency stabilized at $78,740.1 by 18:06 ET, according to market data, after a weekly gain of more than 22% that erased billions in short positions.
The rally followed the U.S. Treasury’s announcement last week to accelerate bond buybacks, a move interpreted by traders as a potential catalyst for dollar depreciation. Analysts at Overseas-Chinese Banking Corporation (OCBC) noted that the policy shift has reframed market expectations, shifting focus from rising yields to broader concerns over U.S. fiscal sustainability and central bank independence.
Ether slipped 1% to $2,449.25, while most major altcoins declined. XRP fell 2%, Cardano dropped 4.1%, and Dogecoin shed 3.1%. Solana eked out a modest 0.1% gain, and BNB declined 0.9%. The memecoin $TRUMP fell 7.6%. Short liquidations totaled $457 million for Bitcoin and $112.3 million for Ether over the past 24 hours, data from Coinglass showed.
The dollar’s decline has coincided with increased flows into gold and cryptocurrencies, often described by traders as a ‘debasement trade’—a strategy aimed at preserving purchasing power amid expectations of long-term currency erosion. The U.S. Treasury’s accelerated buyback program, intended to manage rising yields, has amplified these concerns, fueling demand for non-dollar assets.
The Federal Reserve’s role in maintaining policy independence has also come under scrutiny, with some market participants questioning the central bank’s ability to balance inflation control with fiscal pressures. The Treasury’s actions, combined with broader macroeconomic uncertainty, have reinforced the bid for alternative stores of value.
