Treasury Turmoil Sends Investors Flocking to Bitcoin and Gold
Bond market turmoil sent investors fleeing to alternative assets like Bitcoin and gold this week, sending prices soaring.
The Treasury Department's surprise announcement of increased buybacks of long-term Treasurys on Wednesday sparked a dollar sell-off and sent yields plummeting. This negatively affected the money investors could make on U.S. bonds and the dollar, boosting the value of Bitcoin instead.
Bitcoin had been stuck between $62,000 and $67,000 for weeks before blasting through that upper level to reach above $77,000 by Friday. The Treasury's actions forced many investors who had shorted Bitcoin, or bet that its price would remain subdued, to close their positions as the cryptocurrency surged.
The debasement trade, which involves investors flooding into alternative assets like gold and crypto, now includes Bitcoin. Gold rose more than 2% on Wednesday and reached $4,661 by Friday. The national debt surpassed a record $40 trillion on the same day that the Treasury's actions unfolded.