Bitcoin rebounds on ETF demand and fiscal concerns

Bitcoin’s rebound may signal a renewed “debasement trade,” but persistent inflation, fiscal risks, geopolitical uncertainty and its distance from previous highs still argue for caution.

• Bitcoin rose more than 20% from mid-August and temporarily exceeded $80,000 after a year of mostly steady declines.
• On August 19, Treasury Secretary Scott Bessent announced increased buybacks of long-dated bonds; long-term yields nevertheless rose, while shorter-term yields declined as expectations of further Federal Reserve tightening faded.
• U.S. spot bitcoin ETFs attracted approximately $3 billion of net inflows through late August, including more than $600 million on August 20.
• Bitcoin and gold both advanced as investors revisited scarce and alternative assets amid concerns about inflation, record-high deficits, debt sustainability and currency debasement.
• Bitcoin lagged several crypto peers: eight constituents of the CoinDesk 20 Index outperformed it over the month, while USDC circulation reached $73.3 billion at the end of the second quarter, up 19% year over year, and quarterly on-chain transaction volume rose 151% to $14.8 trillion.

Takeaway: The combination of ETF inflows, institutional interest, broader crypto-market participation and fiscal concerns could mark the end of bitcoin’s 2026 bear market, but the article stresses that a bullish signal may not translate into a sustained rally.