Bitcoin and crypto prices have rocketed over the last week, lifting the combined market by around $500 billion as “panic” spread like wildfire through markets.
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The bitcoin price has come within touching distance of $80,000 for the first time since late May, pushed on by one legendary billioniare investor naming bitcoin among his trade picks.
Now, as BlackRock reveals a surprise bitcoin flip, Treasury secretary Scott Bessent could be about to deliver a fresh, $1 trillion boost to the bitcoin price.
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The Treasury could use its near $1 trillion General Account to help fund bond purchases, according to a CNBC report, citing anonymous sources.
“The Treasury’s intention to bring Treasury yields under control has revived the ‘debasement trade’. Eroding confidence in bonds and currencies driven by the policies of their issuing authorities is leading to capital flight from debt and currency markets to other markets,” Alex Kuptsikevich, FxPro’s chief market analyst, said in emailed comments.
“Assets associated with decentralised finance, namely gold and bitcoin, are proving particularly popular.”
Last week, Bessent gave the bitcoin price a shot in the arm when he said he’s “going to increase the size of the [bond] buyback,” adding that it "could be more than the $4 billion per issue.”
Bitcoin rallied more than 20%, buoyed by growing fears that the Trump administration could trigger a debt crisis as soon as next year as the $40 trillion debt pile spirals out of control.
“We have a big toolkit, so we’ll see,” Bessent said last week.
Bitcoin and crypto traders are feeling increasingly upbeat, with 10x Research analysts declaring bitcoin’s bull market "officially" here.
“We have consistently pointed out that bitcoin would most likely confirm its cycle low in either August or September, with August looking increasingly likely,” 10x Research analysts led by Markus Thielen wrote in an emailed note, adding that the latest bitcoin price rally has awaken the “animal spirits” of the market.
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“The rally in gold prices reached a tipping point, where ‘symbolic’ announcements, like the Treasury shifting some longer-dated bonds into shorter-dated ones and increasing the size from $2 billion to $4 billion, created an outsized 'QE is back’ through some form of operation twist vibe."
Meanwhile, other analysts have pointed to bitcoin’s strong performance against gold over the last week.
“Bitcoin priced in gold is reinforcing my view that the next bitcoin cycle will be the strongest we have ever seen,” Matt Cole, the chief executive of bitcoin treasury company Strive, posted to X, adding, “you’re not bullish enough.”
The bitcoin/gold ratio is an "important signal: within that expanding scarcity trade, bitcoin may be beginning to reassert its relative leadership and reclaim the title of fastest horse.”