Treasury Support Sends Bitcoin Soaring 20% Amid Debasement Fears

Bitcoin has surged about 20% this week, and analysts argue that may be just the beginning of a historic rally.

The uptick in Bitcoin is linked to the Treasury's support for long-dated bonds, which has revived the debasement trade narrative. Blockworks' head of content Felix Jauvin said 'the dovish signals keep firing,' pointing to a shift in marginal macroeconomic policy towards the Treasury.

Treasury Secretary Scott Bessent's support for the long end of the bond market is fueling the narrative for assets like gold and Bitcoin. The U.S. government's push to support the AI infrastructure buildout, much of which is being financed with debt, creates an incentive to prevent long-term Treasury yields from rising too far.

21Shares highlighted a similar dynamic in a research note on Thursday. The Treasury doubled its support for longer-dated government bonds in August, increasing its buyback program from $2 billion to $4 billion.

This move applied downward pressure on longer-term yields producing an easing-like effect for markets. 21Shares senior strategist Matt Mena argued that expectations of a weaker dollar helped drive investors toward scarce assets such as Bitcoin.