Crypto comeback? Bitcoin, ethereum are headed for their best day in months as investors flock to hard assets

By Barbara Kollmeyer and Jules Rimmer

Is the 'debasement trade' back on?

Bitcoin is getting a boost from a bond-market intervention and renewed hopes that President Trump's crypto bill could finally pass.

A crypto comeback is brewing.

After months of slumber, digital currencies are waking up, with bitcoin and ethereum shooting higher on Thursday, as traders credited President Donald Trump's crypto bill initiative and the disturbance in bond markets for reviving momentum in the hard-hit space. Some expressed hope that the latest crypto bear market - which crypto enthusiasts call a "crypto winter" - might finally be drawing to a close after a punishing 10-month stretch.

Bitcoin (BTCUSD) surged 4.8% to $71,693, a level that, if it holds, would mark the highest end-of-day level since May 31, when it traded at $73,449.10, according to Dow Jones Market Data. Ethereum (ETHUSD), meanwhile, leapt 2.7% to $2,275.07 and was looking at its best day since May 14, when it traded at $2297.53. Bitcoin was rising for a fourth consecutive day, having risen 13.8% over this period. But most of these gains accrued following Wednesday's announcement from the U.S. Treasury that it was doubling the scale of its buyback program in what was widely seen as a bid to tamp down long-term bond yields.

"That move appears directly tied to increased liquidity expectations, along with continued progress and greater regulatory clarity around the CLARITY Act," said Daniel O'Regan, managing director at Mizuho Securities in New York, in commentary shared with MarketWatch.

Asked about proposals for the government to accumulate reserves of bitcoin during a press conference at the White House Wednesday, Trump replied: "Certainly it's been talked about. It's taken a lot of pressure off the dollar. It's been very, very good for the dollar. And I think if you came in with recommendations, I would certainly listen."

He later reiterated his commitment to "ensure America remains the undisputed leader, not only in bitcoin and crypto, but also technologies like prediction markets and artificial intelligence."

Trump on Wednesday expressed support for a stalled bill aimed at establishing a clearer regulatory framework for cryptocurrencies, saying Congress needed to pass a "fair version of the Clarity Act," which would keep the U.S. ahead of China and the rest of the world and "open the door to the next wave of innovations and innovators." Senate leadership has scheduled a vote on the bill for next month.

Gains in bitcoin, alongside precious metals like silver (SI00) and gold (GC00), helped revive talk of the "debasement trade" - a popular theme in 2025 as bitcoin and gold prices climbed in tandem. The Treasury Department's latest move helped revive concerns about a reluctance to tackle the U.S.'s sizable budget deficits, just as the national debt crossed $40 trillion for the first time.

A weakening dollar was also a tell that the debasement trade is seeing a bit of a revival. The debasement trade is rooted in concerns that inflation, fiat currency devaluation and unsustainable government deficits will increasingly drive investors and consumers to seek protection in hard assets.

Crypto traders are now eyeing whether bitcoin can make it back above $75,000, which is estimated to be the average cost basis for bitcoin's largest holder, Strategy (MSTR). A move back above that level might help to alleviate concerns that forced liquidations could hurt bitcoin's price.

Another factor helping to push bitcoin higher was the price breaking through its 200-day moving average around $69,000. Many traders interpreted this as a bullish technical indicator.

-Barbara Kollmeyer -Jules Rimmer

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08-20-26 1009ET