Bitcoin tops $80,000 as optimistic mood returns to crypto market

Bitcoin crosses $80,000 as ETF inflows, weaker dollar and renewed crypto optimism fuel a sharp rebound, while falling crude prices lift Indian equities

Bitcoin climbed above $80,000 for the first time since mid-May, as optimism returns to the beaten-down crypto market amid a confluence of bullish signals that forced the liquidation of billions in leveraged bets. 

The original cryptocurrency rose as much as 2.9 per cent to $81,257 on Tuesday before reversing gains to trade little changed around $79,300 at 6.30 am in New York. The token remains well below its peak of about $126,000, reached in October.   

Bitcoin is back in favour as chatter about the debasement trade was renewed by Treasury Secretary Scott Bessent’s  announcement last week that the US will step up its bond repurchases in a bid to lower long-term yields, sparking a fresh round of dollar selling. Skeptics viewed the plan as further evidence the Trump administration isn’t yet ready to do the hard work of reducing the budget deficit. 

 

Bitcoin was originally created as a way to escape fiat currency debasement and inflation driven by central bank money creation. It rallied 23 per cent in the seven days through Sunday, the biggest weekly jump in about three years, as Bessent’s bond-buying plan helped jolt digital assets out of months of sideways trading. The price of gold, another beneficiary of the debasement trade, also advanced.  

 

“The macro backdrop turned more supportive after the Treasury’s expanded long-dated buyback plan helped weaken the dollar and revive the ‘debasement trade’ across Bitcoin and gold,” said Lacie Zhang, a research analyst at Bitget Wallet. 

Bitcoin has been approaching its 50-week moving average of roughly $81,000, a level seen by technical traders as signaling the rally has legs. It has traded below that threshold since November.  

“A close above this WMA level would be further constructive on a continuing bull rally,” said Rajiv Sawhney, head of international portfolio management at Wave Digital Assets. 

Institutional appetite has also returned. Spot Bitcoin exchange-traded funds had their strongest weekly inflow in 10 months last week as the token surged. The 13 US-listed funds drew in a net $1.92 billion, the most since early October last year, according to Bloomberg. 

 

They recorded a further net inflow of $337 million on Monday.

 

That added demand has collided with scant supply of Bitcoin that's available to trade to create upward pressure on prices. Roughly 60% of Bitcoin in circulation hasn't moved for more than a year, according to Cici Lu McCalman, founder of Venn Link Partners. 

"A lot of Bitcoin effectively isn't available to trade," she said. "So when ETF demand suddenly accelerates, the marginal available supply can be quite tight."  

The crypto market got an added boost the day of Bessent's announcement with a meeting between President Donald Trump and industry leaders, which revived optimism around the administration's commitment to crypto. Legislative momentum had slowed recently after the Clarity Act, a market structure bill, failed to make it to a vote before the Senate's August recess. Trump urged the chamber to pass the bill, and it is expected to be taken up again in mid-September. 

The subsequent surge in Bitcoin's price caught many traders off guard. About $7.2 billion in leveraged bearish bets across all cryptoassets were liquidated last week, according to Coinglass data. 

Crypto traders have been hunting for a market bottom for months. Bitcoin has been falling for much of 2026, following a selloff last October that came just after the token hit an all-time high. 

New Market Cycle? 

Still, skepticism remains. Some analysts have pointed to the short squeeze as the main driver of rising prices, raising questions about the sustainability of investor demand. 

One group looking to take profit now could be Bitcoin miners, who McCalman said have been "have been under severe financial pressure." 

The average cost to mine one Bitcoin was just under $80,000 at the end of last year, according to CoinShares. "A move higher could prompt supply to sell from this cohort looking to monetize and de-risk their Bitcoin exposure," Sawhney said. 

A bull market "should not yet be treated as a confirmed trend," Bitfire Research Director Allen Ding said in a note. "If institutional participation, regulatory progress and capital rotation continue to reinforce one another, the current move could mark more than a short squeeze - it could be the beginning of a new market cycle." 

Oil extends fall as investors shrug off latest US sanctions 

 

Oil prices fell further on Tuesday after settling down more than 2 per cent in the previous session, with investors brushing ??off the impact of the latest US sanctions against Iran. Brent crude futures fell 90 cents, or 1.0 per cent, to $91.27 a barrel by 0630 GMT, while US West Texas Intermediate crude was down 76 cents, or 0.9 per cent, at $84.25. Both contracts settled lower on Monday, with crude falling to a one-week low on profit taking after prices rallied over the previous two weeks.

“The market seems unfazed by Washington’s push for economic pressure on Iran, with traders treating the US effort to nudge partners away from Iranian trade as marginal rather than market moving,” said ING commodity strategists on Tuesday. US Treasury Secretary Scott Bessent on Monday unveiled an expansion of sanctions to cut off Iran's economic lifeline, to force an end to the war between them, telling countries they would need to sever their business ties or risk being cut out of the dollar-based financial system. 

 

However, he declined to identify the countries that would be targeted or reveal when those penalties would take effect, saying he would instead provide them time to comply with the new directive.

 

While US Defense Secretary Pete Hegseth said on Monday the US would not rule out using military force against Iran, the country is turning towards more economic coercion, which analysts said removed concerns about threats to Middle Eastern oil supply because of the war.- Reuters

 

Benchmarks close higher on last-hour buying  

Benchmarks Sensex and Nifty pared intraday losses to close higher on Tuesday, driven by buying in the final hour amid a sharp drop in crude oil prices. 

After moving in a range with a negative bias for most of the day, the 30 share BSE Sensex settled higher by 286.98 points, or 0.37 per cent, at 77,656.09. As many as 24 of its constituents ended in gains, and six in losses. During the day, it hit a high of 77,666.39 and a low of 77,125.91. 

The 50-share NSE Nifty also remained volatile before ending higher by 115.50 points, or 0.48 per cent, at 24,334.55.

Among the 30 Sensex firms, InterGlobe Aviation, Adani Ports, Infosys, Trent, Titan, and State Bank of India were the  winners. Eternal, HCLTech, Power Grid, and Bajaj Finserv were among the laggards. PTI