Bitcoin rose above $80,000 to hit a more than three-month high on Tuesday as a soft US dollar, in the wake of the moves by Treasury Secretary Scott Bessent to calm the bond market, revived momentum in the crypto sector.

US President Donald Trump last week called on Congress to pass a bill that would bring clearer definitions to the growing cryptocurrency sector. Since then, bitcoin, the world’s largest cryptocurrency, has risen 16 per cent.

It was last at $80,323.24 in Asian hours, having earlier touched $81,237.94, its highest level since mid-May. Bitcoin is up 28pc so far in August, set for its biggest monthly gain since November 2024.

Cryptocurrencies also got a big boost after the US Treasury last week unveiled plans to buy back more long-dated bonds to help cap the gains in the long-end yields, a move that has led to the US dollar bearing the brunt of investor angst.

Tim Sun, senior researcher at HashKey Group, said Bessent’s messaging has reinforced the market’s view that, at least through the midterm elections, US policymakers may have a lower tolerance for a further rise in long-end yields.

“That would create a relatively supportive macro backdrop for assets such as bitcoin and gold,” Sun said.

Gold has been the other beneficiary of the dollar weakness, rising to a three-month high.

The Treasury announcement is “exactly the type of thing bitcoin loves”, Geoff Kendrick, global head of digital assets research at Standard Chartered, said in a note last week, adding that bitcoin was built to allow investors a way to avoid this type of intervention.

The action stoked increased chatter around the so-called debasement trade, where the moves to prevent long-end yields from reaching market-clearing levels via buybacks lead the pressure to shift from the bond market to the currency market.

“This (Treasury announcement) prompted buyers to scramble into physical and digital assets as debasement trade fears re-emerged,” said Tony Sycamore, market analyst at IG.

“A sustained break above here would open the door for a move towards $95,000 and $100,000.”

– A wavering dollar teetered near multi-month lows on Monday in a market unsettled by the U.S. Treasury’s ​promise to buy back more long bonds, while traders awaited details of sanctions on Iran and on policy ‌speeches this week in the U.S. and Japan.

The Canadian dollar slipped 0.2% in early trade, to C$1.3798 per dollar, after trade talks with the U.S. collapsed and Washington imposed 50% tariffs on Canadian goods, with Canada retaliating in kind.

The Australian and New Zealand dollars traded just shy of three-month highs at $0.7171 and $0.5979 ​respectively.

The euro was comfortably above $1.16 at $1.1685 while the yen kept to the strong side of 159 per dollar.

Friday data showing ​the strongest U.S. services growth in nearly two years in August held off dollar sellers in steady early ⁠trade.

The dollar logged its largest weekly drop against bitcoin in nearly three-and-a-half years on Sunday and it’s been sliding sharply on gold over revived fears the ​currency will suffer if the U.S. tries to hold down yields.

Long-end yields have been climbing globally on a combination of a solid economic ​growth outlook, rising inflation expectations and nerves about ballooning sovereign debts.

Last week, after 30-year yields hit almost two-decade highs, the U.S. Treasury announced it would double buybacks at the long end to $4 billion per operation.
The size is paltry in a market worth $32 trillion but the interventionist signal spooked traders and hit the dollar.

“The ​U.S. Treasury’s attempts to artificially hold down long-term bond yields appears to be reigniting the $US debasement trade,” said Shane Oliver, head ​of investment strategy at Australian financial services firm AMP.

The mood was keeping Australian dollar above 71 cents, he said.
Sterling was firm at $1.3650 in morning trade ‌and the ⁠yuan , which notched an eighth straight weekly rise last week, hovered near a 3/1-2 year high at 6.7222 per dollar.

SANCTIONS AND WARSH

Later on Monday, at 1800 GMT, U.S. Treasury Secretary Scott Bessent is due to hold a press conference after threatening “the toughest sanctions in history” on Iran, with markets focused on whether he will target China.

Iran’s foreign minister has dismissed the threat of new U.S. sanctions as a sign of ​desperation.

Market participants will also be ​hoping for some clarity on ⁠the outlook for U.S. interest rates when Federal Reserve Chairman Kevin Warsh speaks in Jackson Hole, Wyoming, on Friday.

He is also sure to face questions about Treasury’s buybacks.

“Any comments on the balance sheet, ​duration supply, or term premium could move the long end more than the data itself. That ​said, given Warsh’s ⁠typically restrained style, we aren’t holding our breath,” said BNY strategist Geoff Yu.

A Thursday appearance by Bank of Japan deputy governor Ryozo Himino will also be closely watched as a prelude to next month’s policy meeting. In particular, investors will be looking to see if he pushes back ⁠on a ​shift in market pricing to see a faster pace of hikes.

“Himino may signal ​the BOJ is moving closer to another interest rate hike,” said Commonwealth Bank of Australia strategist Joe Capurso.

“However, any hawkish comments are likely to exert only modest downward ​pressure on USD/JPY. Developments in the U.S. bond market area are a more important driver of USD/JPY.”

On the first trading day of the week, Pakistan’s stock market reclaimed the 178,000-point milestone, with the benchmark KSE-100 Index rising more than 800 points in a positive trend.

The Pakistan Stock Exchange saw positive action at the beginning of trade, with the KSE-100 Index gaining by almost 800 points to reach 178,018 points.

At the conclusion of the previous trading session, the benchmark index closed at 177,166 points.