Bitcoin, gold rally as U.S. Treasury bond buying pressures dollar

Traders Union
All News
Financial News
Bitcoin, gold rally on dollar drop

Highlights

Bitcoin surged nearly 8 per cent on Friday to over $78,000, up 24 per cent for the week, as U.S. Treasury bond purchases pressured the dollar.
Gold rose 1.5 per cent on Friday to about $4,585 a troy ounce, gaining over 13 per cent in August for its strongest monthly performance since 1999.
Coinbase, Circle, and Strategy rallied 16, 17, and 21 per cent respectively this week amid crypto gains and optimism following a meeting with President Donald Trump and regulators.

Treasury action fuels debasement trade

As reported by Financial Times, traders are linking the latest gains in bitcoin and gold to the U.S. Treasury's announcement on Wednesday that it would at least double its purchases of long-term government debt. The move has slightly lowered yields on 30-year Treasury bonds but has also weighed on the dollar, amid concern over the purchasing power of the U.S. currency.

Bitcoin jumps nearly 8 per cent on Friday and is up 24 per cent for the week at more than $78,000, its highest level since May. Gold gains 1.5 per cent on Friday to about $4,585 a troy ounce and is up more than 13 per cent in August, putting it on course for its biggest monthly rise since 1999.

Market participants say the shift has revived the so-called debasement trade, in which investors buy assets they expect to hold value if the dollar and other fiat currencies weaken. Mohit Kumar, chief European economist at Jefferies, says gold and cryptocurrencies have delivered a massive performance since Treasury secretary Scott Bessent's announcement, reinforcing the view of a weaker dollar.

One commodities trader says Bessent's move is giving a strong boost to debasement-trade assets, particularly gold and bitcoin. Eoin Walsh, portfolio manager at TwentyFour Asset Management, says erratic and unpredictable policy generally translates into higher premiums, helping explain why the dollar is depreciating.

Crypto rebound lifts tokens and listed firms

Other digital tokens are also moving higher, with Ethereum up 29 per cent over the past week, solana up 17 per cent and XRP up 40 per cent. The advance marks a sharp reversal for a market that has been in a prolonged downturn since last autumn, with bitcoin still down 31 per cent over the past year before this week's rebound.

Analysts say the sudden rise in bitcoin also triggers a short squeeze as traders betting against the cryptocurrency close positions. Axel Rudolph, chief technical analyst at IG, says momentum is feeding further momentum, and that the speed and scale of the rebound show how quickly crypto can turn when liquidity improves and investors rush to chase gains.

Shares of digital asset companies are participating in the rally. Coinbase is up 16 per cent this week, Circle climbs 17 per cent and Strategy rises 21 per cent, reflecting renewed confidence across the sector.

A meeting this week between President Donald Trump, top U.S. regulators and crypto industry executives is also seen as supportive for the sector, which has faced months of stalled debate over a key digital assets market structure bill. The Clarity Act remains stalled in the Senate as Democrats push for ethics provisions, while the Securities and Exchange Commission releases its own crypto rule proposals this week, a step welcomed by the industry.

Our earlier article on Trump’s push for the Clarity Act explained how a White House meeting with crypto executives revived optimism that U.S. market-structure rules could advance ahead of the September Senate vote. We noted that the renewed regulatory hopes—alongside easing yields and a wave of short covering—helped lift bitcoin above $70,000 and boosted crypto-linked stocks such as Coinbase, Circle and Strategy.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.