Why Did Bitcoin Explode Past $81K? 4 Macro Factors Behind the Rally

Bitcoin completed a remarkable turnaround in the past week, surging from under $65,000 on Wednesday to a three-month high above $81,000 earlier this morning.

The move began abruptly on August 19, accelerated in the following days, and, unlike the previous breakout attempts, was not halted painfully in its tracks. Obviously, something changed in the market, but the question is what precisely.

Who Lit the Fuse

The most talked-about reason behind the initial leg up was the US Treasury Department’s announcement last Wednesday that the government would at least double buybacks of longer-dated Treasury securities. This meant an increase in 10- to 30-year debt from $2 billion to at least $4 billion per operation.

At its core, the move was aimed at improving liquidity and easing pressure in the long end of the bond market, where borrowing costs had skyrocketed. Risk-on assets like $BTC, alongside gold, reacted immediately with a surge from $64,000 to $70,000, while Treasury yields declined initially.

Here’s where this narrative breaks down. Long-term yields rebounded almost immediately, while $BTC’s price rocketed by another $10,000-$11,000. According to analysts from the Kobeissi Letter, this suggested that investors were interpreting the Treasury intervention not merely as lower-yield support but as evidence of growing pressure surrounding the US’s fiscal policy.

As previously reported, US federal debt recently surpassed $40 trillion, while persistent deficits and massive refinancing requirements intensified uncertainty about how the government will manage the situation.

Debasement Trade Returns

The US dollar is the second macro piece in this equation. Treasury intervention pressured the greenback and revived Wall Street calls for the debasement trade: capital moving toward scarce assets, like $BTC and gold, when investors fear that fiscal and monetary policies could gradually erode fiat purchasing power.

Source: cryptonews.net