Bitcoin Tops $80,000 and Gold Hits 3-Month High as $40 Trillion US Debt Fuels Hedges
Updated
Updated · CNBC · Aug 25
Bitcoin Tops $80,000 and Gold Hits 3-Month High as $40 Trillion US Debt Fuels Hedges
3 articles · Updated · CNBC · Aug 25
Summary
Bitcoin briefly touched $80,000 overnight Tuesday and gold reached a three-month high Monday, extending a rush into hard assets as investors revived the "debasement trade."
The move followed Treasury's decision to double bond buybacks to at least $4 billion and came after July's monthly budget deficit hit a five-year high, with total federal debt topping $40 trillion.
Markets also punished the dollar and long bonds: the dollar index slid to three-month lows last week, while the 30-year Treasury yield neared 5.34% before buybacks failed to calm investors.
That backdrop is raising policy stakes, with Fed funds futures implying a 56% chance of an October rate hike as traders weigh whether a weaker dollar could worsen inflation.
Wall Street is split on how durable the trade is, though Deutsche Bank said gold could exceed $4,800 and Ray Dalio urged overweight positions in gold and bitcoin ahead of a potential debt crisis.