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.<\/p>\n
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.<\/p>\n
The most talked-about reason behind the initial leg up was the US Treasury Department\u2019s announcement last Wednesday that the government would at least double buybacks of longer-dated Treasury securities. This meant an increase<\/a> in 10- to 30-year debt from $2 billion to at least $4 billion per operation.<\/p>\n 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.<\/p>\n Here\u2019s where this narrative breaks down. Long-term yields rebounded almost immediately, while BTC\u2019s 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\u2019s fiscal policy.<\/p>\n As previously reported<\/a>, US federal debt recently surpassed $40 trillion, while persistent deficits and massive refinancing requirements intensified uncertainty about how the government will manage the situation.<\/p>\n 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.<\/p>\n The precious metal exceeded<\/a> $4,600 per ounce during bitcoin\u2019s rally past $81,000. This synchronized move strengthened the argument that investors are treating both assets as alternatives to government-issued money.<\/p>\n Ray Dalio added fuel to that fire a few days ago, warning<\/a> of a potential US debt crisis and recommending investors own gold and a \u2018bit of bitcoin,\u2019 while the dollar fell<\/a> to a multi-month low.<\/p>\n The Treasury Department\u2019s move led to another important change as markets are increasingly debating whether the government could use its enormous Treasury General Account more aggressively to support the bond market. The account recently stood<\/a> at around $950 billion, and speculation that some of this liquidity could effectively be deployed through expanded Treasury operations has gained significant attention.<\/p>\n Although this is not quantitative easing, in fact, it\u2019s very far away from it, if Treasury actions reduce pressure on long-term borrowing costs, weaken the dollar, or inject additional liquidity into financial markets, the broader environment becomes considerably more favorable for scarce and risk-sensitive assets such as BTC.<\/p>\n Appetite for BTC through the spot Bitcoin ETFs returned with vengeance last week as the figures showed a massive resurgence: almost $2 billion entered<\/a> the funds in just five days, hitting a three-month record. Expectedly, the demand accelerated after Wednesday.<\/p>\n Separately, the rapid move from under $65,000 to $70,000 first and $75,000 a day later forced heavily leveraged bearish trades to close positions. More than $4 billion in shorts were liquidated in less than two days, which helps explain the extreme nature of the reaction.<\/p>\n The Treasury announcement was the initial spark, followed by falling confidence in the dollar, which, alongside America\u2019s fiscal trajectory, strengthened demand for scarce assets. ETF inflows added genuine spot demand, while short liquidations accelerated an already powerful surge.<\/p>\n The post Why Did Bitcoin Explode Past $81K? 4 Macro Factors Behind the Rally<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" 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, […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-218109","post","type-post","status-publish","format-standard","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/218109"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=218109"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/218109\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=218109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=218109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=218109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Debasement Trade Returns<\/h2>\n
Changes in Liquidity Expectations<\/h2>\n
Who Amplified the Move<\/h2>\n