NEW YORK: Bitcoin is on track to post its strongest weekly increase in over three years as traders evaluate the implications of a recent rise in bond yields and a new fiscal consolidation effort from the United States.
The leading cryptocurrency surged by as much as 9.4%, trading at approximately $77,500 during late sessions in New York. Over the past week, it has gained about 23%, marking the largest weekly rise since March 2023 if this momentum continues. Bitcoin was last priced at $80,000 in May.
Market enthusiasm for cryptocurrencies revived after US Treasury Secretary Scott Bessent declared last Wednesday that the department would significantly increase the scale of its long-dated bond buybacks. This announcement spurred an upward trend that forced traders to close billions in short positions.
On the same day, President Donald Trump held discussions with key figures from the cryptocurrency sector, further boosting market optimism.
Additionally, gold reached its highest point since May as investors grew wary about the impact of bond market interventions on the dollar. In a LinkedIn update last Friday, Ray Dalio, founder of Bridgewater Associates, advised investors to diversify their portfolios across various assets and financially stable countries.
He suggested minimizing bond holdings and allocating around 10% to 15% of a portfolio to gold and a small amount in bitcoin to mitigate risk and enhance returns.
“The significant factor was the US Treasury’s decision to double its long-dated bond buybacks, which reduced long yields and generally increased risk appetite,” remarked Rachael Lucas, an analyst at BTC Markets.
“While the underlying case for bitcoin remains unchanged, its volatility has also remained consistent.”
A short squeeze continues to be a key factor in the rising prices of bitcoin, as highlighted by Adam Morgan McCarthy, the lead researcher at LO:TECH, a London-based firm specializing in digital-asset liquidity and market data.
Recent data from Coinglass indicates that nearly $2.5 billion in leveraged bearish positions on bitcoin and around $4.5 billion in total across all cryptocurrency assets were liquidated in the last three days. — Bloomberg