Bitcoin Surges 23% Amid Bond Yield Spike and US Fiscal Consolidation
Bitcoin's price surged by nearly 23% this week, making it the largest weekly gain in over three years. The cryptocurrency jumped as high as $77,500 in late New York trading and is on pace to hit its best weekly performance since March 2023.
The rally comes after a recent spike in bond yields and a new initiative from the US aimed at fiscal consolidation. Traders are assessing the fallout from these events, which have led to an upswing that forced traders to liquidate billions in short positions.
Bridgewater Associates founder Ray Dalio said investors should diversify across assets and countries with strong finances. He suggested holding about 10% to 15% of a portfolio in gold and 'a bit' of Bitcoin, which could both reduce risk and boost returns.
Analysts attribute the rise in Bitcoin's price to a combination of factors, including the US Treasury doubling long-dated bond buybacks, which pulled long yields lower and lifted risk appetite broadly. A short squeeze continues to drive rising prices, with nearly $2.5 billion in leveraged bearish bets on Bitcoin and $4.5 billion across all crypto assets liquidated in the past three days.