Key facts
- Bitcoin surged above $77,000 on Friday, recovering from a June low below $60,000.
- Gold rose to $4,661 on Friday, recovering from a June low around $4,000.
- The U.S. Treasury Department announced it would at least double its planned purchases of longer-term government debt.
- President Donald Trump called for Congress to pass crypto-friendly legislation.
- The U.S. national debt surpassed $40 trillion.
Bitcoin and gold experienced a significant rebound this week, recovering from recent lows and attracting investor interest. Bitcoin, which had fallen from a January high of around $95,000 to below $60,000 by the end of June, surged above $77,000 on Friday. Similarly, gold recovered from a June low of approximately $4,000 to reach $4,661 on Friday, after hitting a high above $5,300 in January.
The rally in both assets was partly driven by a surprise announcement from the U.S. Treasury Department on Wednesday, which plans to significantly increase its buybacks of long-term Treasurys. This move aimed to stabilize bond markets amid a sustained sell-off and resulted in a dollar sell-off and a jump in the value of gold and bitcoin as investors sought alternative assets.
Adding to the momentum, President Donald Trump, who reportedly earned about $1.2 billion from crypto holdings last year, held a crypto conference at the White House. He urged Congress to pass the crypto-friendly Clarity Act, emphasizing its importance for U.S. competitiveness against China. Commodity Futures Trading Commission Chair Mike Selig also pledged to advance Trump's agenda, with the CFTC examining ways to ease crypto rules.
The U.S. national debt surpassed a record $40 trillion on the same day the Treasury's debt buyback plans were announced. This, coupled with anxieties over inflation and soaring energy prices due to conflicts, contributed to a 'debasement trade' where investors move into alternative assets like gold and bitcoin. Bitcoin's price, which had been trading between $62,000 and $67,000 for weeks, broke through these levels as Treasury yields and the dollar fell. This surge forced investors who had shorted bitcoin to close their positions by buying the cryptocurrency, further driving up its price and leading to over $4 billion in liquidations of bearish positions.