Bitcoin and gold climbed sharply after U.S. Treasury Secretary Scott Bessent announced an expansion of long-dated Treasury buybacks, a move the Financial Times linked to renewed demand for safe-haven assets and trades built around fears of currency debasement.
Bitcoin rose nearly 8% on Friday. Its gain for the week reached 24%, sending the price above $78,000 and to its highest level since May this year. It is now on track for its best weekly performance in more than three years.
Long-term Treasury buybacks sharpen dollar concerns
Market participants said the main driver behind the rally was the U.S. Treasury’s larger long-term bond purchase plan. Bessent had previously said the scale of long-dated Treasury buybacks would increase by “at least double.”
The measure pushed down 30-year Treasury yields in the short term, but it also raised worries about the dollar’s purchasing power. The dollar index then continued to weaken.
Mohit Kumar, chief Europe economist at Jefferies, said gold and crypto assets saw a “sharp rise” after Bessent announced the measures, adding support to expectations of a weaker dollar.
Gold rises with crypto as debasement trade returns
Gold posted strong gains as well. It rose 1.5% on Friday to about $4,585 an ounce. Its advance for August exceeded 13%, putting it on course for the biggest monthly jump since 1999.
The rally has revived the so-called debasement trade, with investors using assets such as gold and bitcoin to hedge against a loss of purchasing power in fiat currencies.
That trade had earlier been interrupted after inflation pressure tied to the U.S.-Iran conflict picked up. The market has now turned back toward expectations of easier liquidity.
Ether, Solana, XRP and crypto stocks also move higher
Beyond bitcoin, Ethereum, Solana and XRP rose 29%, 17% and 40%, respectively, over the past week.
Crypto-related stocks also climbed. Coinbase gained 16% this week, stablecoin issuer Circle rose 17%, and bitcoin-holding company Strategy added 21%.
The rebound follows a long weak stretch for the crypto market dating back to last autumn. Over the past year, bitcoin’s maximum drawdown at one point reached 31%.
Short squeeze and policy developments add to momentum
Analysts said bitcoin’s rapid rise triggered a short squeeze, forcing many bearish positions to close and adding fresh upward pressure on price.
At the same time, President Donald Trump met this week with regulators and crypto industry executives, while the U.S. Securities and Exchange Commission introduced a new crypto regulatory proposal. The market also viewed those developments as supportive for the sector.