Bitcoin at $77,000: Non-State Stores of Value Rally Ahead of Jackson Hole

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Bitcoin and gold have spent years competing for the same slot in a portfolio, the scarce store of value that sits outside the state monetary system. Investors who back one usually argue against the other. Last week both climbed sharply at the same time, and in both cases the trigger came from the same place: the US Treasury.

The move is holding as the new week begins. Bitcoin is trading around $77,085, up almost 22 percent over seven days, after starting the previous week between $63,000 and $65,000. Gold sits near $4,644 an ounce, its highest level in three months, following a weekly gain of roughly 5 percent.

The largest crypto assets at a glance, excluding the stablecoins USDT and USDC:

The breadth of the move stands out. In defensive phases, capital tends to gather in Bitcoin first, yet the large altcoins are currently outrunning the market leader. Zcash is the standout with a weekly gain of almost 64 percent, while XRP has added more than 46 percent.

The Trigger Came From Washington

The decisive impulse came from the US Treasury and its plan to expand buybacks of longer-dated government bonds. For certain maturities the maximum size of those operations is set to rise from $2 billion to at least $4 billion, with the stated goal of improving how the Treasury market functions. The 30-year yield had previously climbed to its highest level since 2007.

For risk assets, the signal matters more than the size. Long-end yields eased, the dollar softened, and the sustainability of US government debt moved back into focus after passing the $40 trillion mark. That is the environment in which scarce, non-sovereign stores of value gain appeal, a role gold has played for centuries and Bitcoin for a little over a decade.

The pace came from the derivatives market. Many traders had positioned for further declines after a weak few months. When Bitcoin cleared key technical levels midweek, more than $1 billion in short positions was liquidated within an hour, and more than $3 billion across the rally as a whole, as Trending Topics reported. In the process, Bitcoin reclaimed its 200-day moving average for the first time in months.

Two Analysts, Two Readings

Adrian Fritz, vice president and chief investment strategist at crypto ETP issuer 21Shares, sees several forces working together: an improved backdrop for risk assets, defensive positioning that set off the squeeze, and increasingly concrete regulatory signals from Washington. The Securities and Exchange Commission published its proposed Regulation Crypto Assets in the previous week, which would ease capital raises of up to $5 million over four years and up to $75 million over twelve months, and create a safe harbor for defined situations. None of it is law yet, though Fritz considers the direction meaningful.

He is careful about how he reads the buybacks. They remain a Treasury measure and therefore sit outside conventional monetary policy, so no new quantitative easing program from the Federal Reserve stands behind them. His central question looks past the next price level: “What matters is whether the market can stabilize above $70,000 once the forced buying in the derivatives market has worked its way through.”

James Butterfill, head of research at CoinShares, reads the situation with considerably more skepticism. To him the rally is primarily a macroeconomic story wearing a crypto price tag. He views the expanded buybacks under Treasury Secretary Scott Bessent as a problem: they relieve pressure at the long end only temporarily, and they have to be funded through new issuance further along the curve. That shortens the average maturity of government debt and leaves the fiscal position more exposed to the Fed’s rate decisions.

There is also a contradiction that helps explain the gold price. Higher long-term yields had been doing part of the Fed’s tightening work. Once the Treasury pushes those yields down, financial conditions loosen, the dollar weakens and imports become more expensive. Butterfill’s conclusion is that pressure at the long end is being traded for a weaker currency and higher imported inflation, while the underlying question of fiscal credibility stays open. That pattern, known in the market as the debasement trade, is what is currently lifting the metal as well.

Positioning has at least improved. Large investors have stopped selling and are starting to accumulate again. Digital asset investment products drew roughly $1.3 billion in inflows over the previous week, including about $715 million in a single day and around $1 billion into Bitcoin products. Year-to-date flows have turned positive again after a prolonged soft patch.

Jackson Hole Decides This Week

The next big test arrives shortly. At the Jackson Hole symposium, Kevin Warsh speaks on Friday for the first time as Fed chair. If he confirms the dovish stance the market has increasingly priced in, Butterfill says it could trigger a breakout above $80,000, the level he otherwise treats as the ceiling. A more restrictive message would remove the rally’s most important support.

That leaves crypto investors with three things to watch: the signals out of Jackson Hole, whether the 200-day moving average now acts as support rather than resistance, and whether ETP inflows persist once the short squeeze has fully unwound. Gold’s parallel climb supplies the context. As long as the market questions the sustainability of US public finances, scarce assets benefit together. Should the Fed disappoint the dovish expectations, the path back down is likely to run in the same direction for both.