On Monday, Bitcoin and cryptocurrency-related stocks continued their upward momentum from the previous week, with the flagship digital asset breaking out of its recent trading range as investor concerns over inflation and fiscal deficits intensified.
Bitcoin climbed more than 1% during the session, approaching the $80,000 mark for the first time since May, while Ethereum rose 2% to roughly $2,470, nearing its highest level since January. Crypto-exposed stocks followed the blue-chip digital assets higher, with Strive jumping 8%, Strategy (MSTR.US) adding 2%, and Bitmine and Sharplink, both holding Ethereum positions, advancing 5% and 4%, respectively.
Market participants are now questioning whether this rally signals a turning point for Bitcoin, which had remained subdued since October. The move arrives during a seasonally strong window, and BTIG analyst Jonathan Krinsky noted in a Monday report that Bitcoin exhibited a similar pattern in January 2023, surging about 20% in three days and breaking above its downward trendline before the rally faded and price found support at the 200-day moving average.
The current upswing originated from a macro shift last week. Following the U.S. Treasury's announcement that it would double its purchases of long-term government debt, yields briefly declined, boosting demand for risk assets like Bitcoin and scarce assets such as gold. This also triggered a short squeeze in Bitcoin, with cumulative three-day gains exceeding 20%, the largest since 2023.
Institutional demand has returned in tandem, with spot Bitcoin ETFs recording net inflows of $1.92 billion last week, the biggest weekly intake since October when Bitcoin hit its cyclical peak. Additionally, over $4 billion in crypto short positions were liquidated as prices climbed. Bridgewater Associates founder Ray Dalio also provided extra support for the asset class, warning that major economies could face a debt crisis in the coming years and advising investors to hold a "modest allocation" to Bitcoin.
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