Key facts
- Bitcoin surpassed $81,000, marking its highest point since January.
- The cryptocurrency experienced a 25% gain over the past week.
- U.S. spot Bitcoin ETFs saw inflows of $1.92 billion last week and $338 million on August 24.
- The U.S. Treasury's plan to double liquidity-support buyback operations has boosted Bitcoin.
- Market observers are considering if the 'debasement trade' is re-emerging.
Bitcoin surged past $81,000 on Monday, reaching its highest level since January, as a combination of strong inflows into U.S. spot Bitcoin exchange-traded funds and news of expanded U.S. Treasury buyback operations fueled a significant rally. The cryptocurrency has seen gains of over 25% in the past week.
Last week, U.S. spot Bitcoin ETFs attracted nearly $2 billion in net inflows, with an additional $338 million recorded on August 24. This renewed investor interest, particularly from institutional players, comes as the U.S. Treasury announced it would at least double the size of its liquidity-support buyback operations. This move has weakened the dollar, benefiting non-yielding assets like Bitcoin.
The recent price action has led some market observers to question whether the 'debasement trade'—a strategy of buying assets like Bitcoin to hedge against currency devaluation—is making a comeback. This strategy, popular in 2025, had waned as traders shifted focus to AI-related stocks. However, with a weakening dollar, Bitcoin may be attracting longer-term investors seeking a hedge against inflation and currency depreciation.
Bitcoin had previously reached a record high of $126,080 in October, but a subsequent liquidation event and negative macroeconomic headwinds, including fears of delayed Federal Reserve interest rate cuts, led to a price decline in 2026. Despite these challenges, analysts note that Bitcoin has become less volatile and has experienced a shallower bear market than in previous cycles.