6 min read Bitcoin is extending gains by 4% on Friday to a 12-week high of $76,000. The largest cryptocurrency is on track to gain more than 21% this week, which would be its strongest weekly performance in two and a half years.
The move higher has not been confined to Bitcoin. Ethereum has gained 26% over the past seven days, while Solana is up 20% and Hyperliquid has surged more than 30%.
The strength in crypto stands out against U.S. equities, with the S&P 500 on track to fall around 1.8% this week, which would be its weakest weekly performance since July.
The BTC rally has also coincided with a weaker USD, which is trading around a three-month low and is down almost 1% this week. Gold is also heading for a gain of more than 4%, marking its third consecutive weekly advance.
Why is Bitcoin rising?
The initial catalyst for both gold and Bitcoin came from the U.S. Treasury Department’s efforts to contain long-term borrowing costs. Earlier this week, the Treasury announced that it would double buybacks of longer-dated Treasury securities to at least $4 billion per operation over the next quarter, helping to push long-term yields lower.
Treasury Secretary Scott Bessant added yesterday that the government could increase those purchases further.
The timing is significant. The announcement came as U.S. national debt crossed $40 trillion for the first time, increasing concerns over the fiscal position and bringing the so-called debasement trade back into focus.
A weaker dollar, rising government debt and concerns over the sustainability of U.S. borrowing can encourage investors to look towards alternative assets such as Bitcoin and precious metals.
That helps explain why both Bitcoin and gold have rallied while the dollar has weakened.
However, Bitcoin’s outperformance of gold suggests that something more specific to crypto is also driving the move.
Crypto-specific catalysts
President Trump has urged lawmakers to pass a “fair” version of the Clarity Act, which aims to establish a clearer legal framework for cryptocurrencies and digital assets.
The Senate is expected to vote on the legislation on September 15.
If passed, clearer rules could reduce the regulatory risk premium around Bitcoin and make it easier for banks, asset managers and corporations to allocate capital to the sector.
Institutional demand is also returning.
According to SoSoValue data, spot Bitcoin ETFs recorded $606.3 million in net inflows on Thursday, marking the fourth consecutive day of positive flows.
ETFs are now on track to record around $1.61 billion of net inflows this week, which would be their strongest weekly inflow since October last year.
That marks a significant turnaround from May and June, when Bitcoin ETFs recorded around $8 billion of net outflows.
Can Bitcoin reach $80K?
Part of the recent rally has been driven by short covering.
Around $3 billion of short positions were liquidated during the move higher, creating a short squeeze that accelerated the rally.
That matters because short covering can push prices higher very quickly, but it eventually runs out of fuel.
For Bitcoin to continue towards $80K, the next leg needs to be driven increasingly by fresh buying rather than traders simply closing bearish positions.
Technically, Bitcoin has now broken above the 200 EMA, making the outlook more constructive. However, the question is whether this is a durable breakout or simply an extension of an already very strong move.
$80K is the next major psychological and technical barrier. A decisive break above it would strengthen the bullish outlook, but it may require clearer evidence that the Federal Reserve is moving away from further tightening.
That makes next week’s Jackson Hole Symposium particularly important.
The annual event gives Fed Chair Kevin Warsh a platform to discuss inflation, interest rates and the outlook for monetary policy. Given Warsh’s tendency to provide limited forward guidance, even a small shift in his language could move markets, particularly with investors currently pricing in a 65% probability that the Fed leaves rates unchanged in September.
So, can Bitcoin reach $80K? Yes, but the rally now needs to prove that it has moved beyond the short squeeze. Continued ETF inflows, regulatory optimism, a weaker dollar and contained Treasury yields would provide the strongest foundation for the next leg higher.
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