Bitcoin jumps on dollar weakness, near $79,450

2026-08-21

Buying dominates as the dollar falls

Bitcoin, the leading cryptocurrency, has surged. In early trading on the 20th in U.S. Eastern time, it briefly rose to around $79,450. Its weekly gain has topped 20%, putting it on pace for its biggest rise in about two and a half years.

Weekly gain could be the largest since 2023

Because bitcoin trades 24 hours a day, 365 days a year, including weekends, the final weekly performance depends on subsequent moves. Even so, the weekly gain could exceed the 21.4% rise in late February 2024 and mark the biggest increase since the 30.2% jump in mid-March 2023. In the market, buying has stood out as the value of the benchmark dollar declines. Bitcoin has the character of a 'stateless currency', and has at times been chosen as an alternative to the dollar.

Dollar index hits three-month low

The U.S. Treasury Department said on the 19th that it would double the amount of buybacks of longer-dated U.S. government bonds with ultra-long remaining maturities until redemption. The move was a response to the 30-year Treasury yield rising on the 18th to its highest level in about 19 years, which pushed bond prices lower. Following the announcement, the dollar fell sharply against major currencies, and the dollar index, which shows the dollar's overall strength, hit its lowest level in about three months.

The funds for buybacks of ultra-long bonds must be raised through Treasury bill issuance, so government debt is not reduced. Still, the view spread that a measure seen as market intervention would loosen financial conditions in the United States, helping drive the dollar lower.

Gold also at a roughly three-month high

Futures for gold, viewed as a safe-haven asset, also rose. The December contract, the benchmark on the New York Mercantile Exchange's COMEX division, settled on the 21st at $4,680.6 per troy ounce. During the session, it also touched its highest level in about three months. Some market participants also said a 'debasement trade' to hedge against a decline in the value of the U.S. dollar was spreading again.

Jeffrey Yu of Bank of New York Mellon said, 'The market's view that intervention cannot come without a cost is reflected in the rise in gold and bitcoin prices and the further decline in the dollar.'

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