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Days after Bessent announced the Treasury planned to double long-term debt buybacks from $2 billion to at least $4 billion, Bitcoin jumped to nearly $80,000. The rest of the crypto market followed. The question is: can it last?
Bitcoin is back, rebounding from its early-February 2026 lows after nearly 200 days of sideways action. It spent about 120 days falling from its $130,000 highs to as low as $59,800, or a 52% drop.
Why Bitcoin fell from such heights is a mix of conspiracy and the commodity's four-year cycle. After Bitcoin peaked in late December 2017, it took about 1,420 days to reach its then all-time high of ~$69,000 in December 2021. Bitcoin took the same amount of time to reach its October 2025 high of ~$130,000, only to fall once again.
On August 19, Bessent stepped in with his now-infamous debt-management decision involving U.S. bonds, and told the Fed to kick rocks. Yields fell from their 19-year highs, making Bitcoin, still viewed as a risky stock, that much more attractive. Another $2.74 billion in short positions surely helped, too, as Bloomberg reports.
Bessent's bond intervention worked for about two days. By Friday, yields were close to where they were on Wednesday.
We could have seen this coming: Bessent's intervention in Japan didn't work. If bond markets ignore Bessent's attempt to take the reins, this week's pump could end up as another fake-out, like we saw in late February and late March, as the risk-free rate rises. Liquidity could also get squeezed, which historically have never been good for Bitcoin.
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The short-term "yield trade" isn't Bitcoin's only tailwind, though. It's also a currency-debasement trade, according to infamous hedge fund manager Ray Dalio.
Dalio urged investors to go "underweight debt assets like bonds" and "overweight gold and a bit of Bitcoin" because of U.S. debt, which hit $40 trillion this week, in a LinkedIn post.
"When you look at the arithmetic, it's simple," Dalio said. "We're approaching a tipping point where financing the debt will either force sharply higher rates or aggressive money printing, both of which are bad for bondholders and currency holders."