Bitcoin soared past $81,000 for the first time since January on Monday before dropping slightly. The recent moves have market observers asking if the debasement trade is back.
The biggest cryptocurrency was recently trading for $79,098 on Tuesday morning in New York after hitting $81,160 the evening before. Over a 24-hour period, the coin now sits unmoved. But zoom out seven days and it has jumped by 23%.
Bitcoin has benefited from news that the Treasury would at least double the size of its liquidity-support buyback operations. The announcement last week hurt the dollar but non-yielding assets have benefited.
This has some asking whether 2025’s much talked about debasement trade is back. The strategy — when investors buy an asset as a way to hedge against a currency losing value — has in the past benefited Bitcoin along with precious metals because such assets cannot be endlessly printed.
Analysts frequently touted the trade last year but following Bitcoin’s decline since October, it became less talked about as traders turned their attention to stocks related to artificial intelligence.
Though since the dollar has become increasingly weaker, Bitcoin could be attracting longer-term and “smart money” investors, market observers have said.
U.S. investors last week piled back into Bitcoin exchange-traded funds; the investment vehicles had their best week since October, with nearly $2 billion in inflows.
Bitcoin notched a new record of $126,080 in October before the biggest liquidation event in crypto history hurt its price. It continued to dip in 2026 on negative macroeconomic headwinds and fears that the Federal Reserve would not lower interest rates.
Still, it has become increasingly less volatile and so far has suffered from its shallowest bear market, according to analysts.
