Bitcoin Reclaims $80,000 After Three Months. Can It Run Back to $100,000?

Funds Pour In on Treasury Buyback Plan, Easier Regulatory Outlook

Spot ETFs Extend Net Inflows to Seven Straight Sessions

Bitcoin Pauses at $80,000 Threshold as Traders Watch Next Pullback

Bitcoin is taking a breather after climbing back above $80,000 for the first time in more than three months. The cryptocurrency has rallied more than 20% over the past week as the U.S. Treasury's plan to expand long-dated bond buybacks, a weaker dollar and expectations for looser digital-asset regulation drew fresh money into the market. Analysts see room for a short-term pullback, though continued inflows into spot Bitcoin exchange-traded funds may determine whether the rally extends further.

Funds Pour In on Treasury Buyback Plan, Easier Regulatory Outlook

Bitcoin traded at $78,915.27 as of 3:55 p.m. on Aug. 26, according to CoinMarketCap. That was down 1.97% from a day earlier but up 22.81% from a week ago.

The token rose as high as $81,237.94 intraday on Aug. 25, its highest level since mid-May. It has since hovered around $79,000 as traders pause following the sharp run-up.

The rally was sparked by the U.S. Treasury's decision to expand repurchases of long-term government bonds. Starting Sept. 9, the Treasury will increase each buyback of 10- to 20-year and 20- to 30-year Treasuries to at least $4 billion from a previous maximum of $2 billion. The move is aimed at stabilizing supply and demand in long-dated bonds and easing pressure from rising yields.

Seo Sang-young, an analyst at Mirae Asset Securities, said the Treasury's expanded long-bond buybacks drove Treasury yields and the dollar lower, prompting demand for assets that hedge against a decline in currency value and helping Bitcoin break above $80,000. Some of those gains were later erased as investors took profits after the token's more than 20% surge over the past week, he added.

Markets also read the move as a sign of mounting U.S. fiscal strain. Concern that rising government debt could undermine the dollar has pushed money into alternative assets such as gold and Bitcoin.

Expectations for a clearer U.S. regulatory framework for digital assets also supported buying. On Aug. 18, the U.S. Securities and Exchange Commission unveiled a proposed digital-asset regulatory framework covering token issuance and fundraising.

The proposal would allow digital-asset businesses that meet certain conditions to raise funds without registering securities, while laying out a process for crypto assets to move beyond the definition of an investment contract. The measure remains at the proposal stage and faces a 60-day public comment period. Even so, it gives businesses a clearer way to determine whether securities laws apply and what procedures are required.

Shim Su-bin, an analyst at Kiwoom Securities, said the SEC is helping fill part of the regulatory gap for blockchain businesses in the U.S. as legislation on the Clarity Act remains delayed. Under reduced regulatory uncertainty, blockchain-related business in the U.S. should continue, she said.

The Clarity Act is intended to define the regulatory framework for digital assets and the roles of supervisory agencies. The bill remains stalled in Congress as Democrats and Republicans have yet to narrow their differences.

Bitcoin Pauses at $80,000 Threshold as Traders Watch Next Pullback

Inflows through spot ETFs have also continued. U.S. spot Bitcoin ETFs posted net inflows of $314.37 million on Aug. 25, according to crypto data provider SoSoValue. That marked a seventh straight trading day of net inflows, bringing the total over the period to about $2.46872 billion.

Data from Farside Investors showed BlackRock's iShares Bitcoin Trust, or IBIT, drew $284.4 million that day, accounting for more than 90% of the total. Fidelity's FBTC took in $15.4 million, followed by Grayscale's BTC with $7 million, Morgan Stanley's MSBT with $4.5 million and Bitwise's BITB with $3 million. The remaining products recorded no net inflows or outflows.

Analysts say Bitcoin's rapid advance may leave it vulnerable to a correction before any further gains.

Ryan Lee, chief analyst at Bitget Research, said spot demand, including institutional buying, needs to take over from the recent wave of purchases driven by short-position liquidations. Continued inflows into spot Bitcoin ETFs would strengthen the case for another leg higher.

Lee expects Bitcoin to trade between $74,000 and $81,000 in the near term. A pullback to $75,000 to $76,000 would be a natural move after the recent surge. If Bitcoin can hold above $80,000, it could rise toward $82,000 to $87,000.

Samir Kerbage, chief investment officer at Hashdex, said the $80,000 to $90,000 range saw very little historical trading volume, meaning prices could move quickly in either direction. Consolidation between $75,000 and $83,000 would help build a base for further gains. If Bitcoin can stay firmly above $83,000, the door could reopen for another test of $100,000.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com