Bitcoin surged to its highest level since early June, trading at $69,811 on Thursday, up from under $65,000 the previous morning, as declining U.S. Treasury yields increased its appeal to investors.
The advance followed the U.S. Treasury Department's unexpected announcement that it would expand buybacks of long-dated bonds, a move that eased pressure on the beleaguered bond market. The yield on 30-year Treasuries, which had climbed to a 17-year high amid persistent selling, fell in response. The Treasury's decision underscored concerns over the prolonged selloff in government debt, driven by mounting inflation concerns, geopolitical tensions from the Israel-Hamas war, soaring U.S. debt levels, and heavy capital demands from major AI firms.
Lower long-term yields reduce the opportunity cost of holding non-yielding assets like Bitcoin, which has no intrinsic income stream. The cryptocurrency's recent gains also reflect shifting investor sentiment, as risk appetite returns after weeks of heightened market caution.
Analysts noted that Bitcoin's rebound coincided with growing expectations that the asset class could regain political priority in the U.S. ahead of the November elections. «Investors are hoping that Bitcoin and other cryptocurrencies will move higher on Donald Trump's policy agenda, with expectations of regulatory easing,» said Timo Emden, chief market analyst at Captrader. He added that the recent measures by the Treasury have «taken pressure off the boiling bond market» and encouraged risk-taking in crypto.
The cryptocurrency's upward momentum had previously been constrained by concerns over potential Federal Reserve interest rate hikes, which typically increase financing costs and prompt investors to reduce exposure to riskier assets. Oil price volatility, tied to geopolitical risks in the Strait of Hormuz, had also weighed on sentiment, though prices have since stabilized despite the ongoing threat of supply disruptions.
