Bitcoin Surges to $79,500 as Dollar Falls to Three-Month Low

Bitcoin surged to its highest level since May on Friday, reaching about $79,500 on the Coinbase exchange before trading at around $77,600. The cryptocurrency's price has been boosted by a decision from the US Treasury Department to double the volume of its longer-term debt buybacks, starting September 9.

The move aims to hold down the rise in Treasury yields at a time of a widening fiscal deficit and heavy debt issuance. However, the strategy has not achieved that goal: yields have started climbing again, with the yield on 30-year US bonds hitting its highest level since 2007.

The dollar fell to a three-month low against the euro, which touched $1.1711 before pulling back to trade around $1.1682. Marc Chandler, chief strategist at Bannockburn Global Forex, explained why the move failed to support the dollar: 'Bessent's efforts to hold down yields have not meaningfully moved yields, but they have undercut the dollar.'

Bitcoin's rally comes as it has been rising faster than any other major market this week. The cryptocurrency hit an all-time high of $126,080 last year, and Geoffrey Kendrick, head of digital assets research at Standard Chartered, wrote that the earlier year-end forecast of $100,000 had been set too low.

Kendrick said a run back to the $126,000 record before the end of the year becomes possible once investors remember how quickly prices can accelerate to the upside. The next marker for markets is a speech by Federal Reserve Chair Kevin Warsh at the central bank symposium in Jackson Hole, which could put further pressure on the US currency.