Bitcoin Surges Past $80,000 as Debasement Trade Revives

Bitcoin's price surged to a three-month high above US$80,000 on August 25, driven by renewed optimism and a confluence of bullish signals. The token climbed as much as 2.5% to US$80,908 in Asia, its highest level since mid-May. This rally follows a 23% increase in the seven days through August 23, the biggest weekly jump in about three years.

The surge is attributed to the debasement trade, which saw a new round of dollar selling after US Treasury Secretary Scott Bessent's announcement last week that the US will step up its bond repurchases. This move sparked fears of further inflation and currency devaluation, driving investors towards safe-haven assets like Bitcoin.

Bitcoin was originally created as a way to escape fiat currency debasement and inflation driven by central bank money creation. Lacie Zhang, a research analyst at Bitget Wallet, noted that the macro backdrop turned more supportive after the Treasury's expanded long-dated buyback plan helped weaken the dollar and revive the 'debasement trade' across Bitcoin and gold.

Spot Bitcoin exchange-traded funds saw their strongest weekly inflow in 10 months last week, with a net US$1.92 billion influx. The 13 US-listed funds also posted their biggest single day of inflows in over three months, pulling in US$606.3 million on August 20.